FM to meet GST panel on November 8

Finance Minister P Chidambaram will meet members of the Empowered Committee (EC) of state finance ministers on November 8 to sort out the issues concerning implementation of the Goods and Services Tax (GST).

"Finance Minister P Chidambaram will meet EC members on November 8," a senior finance ministry official said.

Before meeting the committee members, Chidambaram will hold discussion with the chairman of committee, Sushil Modi on October 22.

GST, which will empower the Centre and states to simultaneously tax supply of goods and services, was to be introduced from April 2010 and has missed several deadlines.

The Bill is currently being vetted by the Parliamentary Standing Committee on Finance. The committee had raised certain queries to which the revenue department has already responded. The report of the committee is awaited.

Earlier, while talking to a conference of economic editors, Chidambaram had said he was confident that after meeting Modi and the entire EC, the Centre will be able to resolve all issues concerning GST.

Issues related to GST network (GSTN) and matter of further Central Sales Tax (CST) are cause of delay in the implementation of the GST.

Moreover, states are also raising issues relating to dispute settlement mechanism and exclusion of certain products from the GST system.

The CST is collected by the Centre and distributed among states. As a pre-cursor to GST, Centre and States in April, 2007, had agreed to phase out CST over a period of three years and in line CST rate was reduced to 3 per cent and then to 2 per cent. The Centre had already compensated states for losses up to 2010-11.

As the Centre refused to go on compensating the states for delay in implementation of GST, states had argued that when it was decided to phase out CST, it was presumed GST would be implemented from April, 2010.

Recently, Modi had sought Prime Minister Manmohan Singh's intervention to resolve the compensation issue.

States have also suggested that they should be allowed to restore the CST rate to four per cent in case the central government was not able to pay any further compensation.

Earlier in August, Chidambaram had hoped that the Constitutional Amendment Bill to implement the Goods and Services Tax regime (GST) will be passed by March 2013.