GST panel chief Sushil Modi praises P Chidambaram

MUMBAI: Calling the proposed Goods and Services Tax ( GST) as the "baby of Finance Minister P Chidambaram", Chairman of Empowered Committee of State Finance Ministers on GST SushilModi today said things have moved fast after he took charge of the Ministry.

"In the last one year, specially after Chidambaram became Finance Minister (in August 2012), things are moving very fast (on GST front)," Modi, BJP leader and also Deputy Chief Minister of Bihar, told reporters on the sidelines of an event here.

"It's Chidambaram's baby. He had announced it in 2007 when he was the Finance Minister. So, naturally, when he becomes the Finance Minister (again), he is taking more interest and trying to resolve these issues (related to GST implementation)," Modi said.

About the stand-off on the proposed new taxation regime before Chidambaram took charge, he said this was due to the Centre's refusal to compensate the states after slashing CST (central sales tax) to 2 per cent from 4 per cent.

"Earlier there was dispute regarding CST compensation ..when CST was reduced to 2 per cent from 4 per cent, most of the manufacturing states were incurring heavy losses. At that time, the Central Government had assured states it will compensate the losses incurred by them. But GST couldn't be implemented in April 2010...meantime, the Centre refused to compensate the states. So, there was a stand off...,"

"But, when Chidambaram became the Finance Minister, he assured the Centre would compensate the states," Modi added.

GST, a major tax reform in the country, is getting delayed due to differences between the Centre and the states over issues like its design and the compensation for CST.

It was originally scheduled to get implemented from April 2010. However, Modi said around 80 per cent of the issues had already been resolved.

When pointed out about the good words for Chidambaram (a Congress leader) by him considering that he belongs to Opposition BJP, Modi said it (the praise) was only in the context of GST and not any other issue.