Panels to look into CST relief , GST design issues, says Chidambaram

Union Finance Minister P Chidambaram on Thursday said two committees will be constituted to sort out contentious issues that hamper implementation of the Goods and Services Tax (GST).

While one committee will deal with the Central Sales Tax (CST) compensation issue, the other will deliberate on the design of the GST, Chidambaram said after meeting the Empowered Group of State Finance Ministers here.

“The committees will submit their reports by December 31,” Chidambaram said. These two issues will have to be addressed to ensure implementation of the GST, he added.

“The (CST compensation) issue has to be addressed. Compensation is being paid for about two years and then partially for third year but then compensation has not been paid subsequently. That issue has to be addressed. We can’t duck that issue,” he said.

“The other issue is the design (framework) of GST. All states support GST without exception. All of them said we support GST but we would like to discuss the design of GST,” he said.

While the two sub-committees would be constituted by Empowered Committee Chairman Sushil Modi, the Central government would nominate its members to the committee. The revenue secretary would head both the committees.

After the two sub-committees finalise their reports, the Union finance minister would take up the report.

Resolve CST matter

States want the Central government to resolve the CST compensation issue before moving ahead with the rollout of the GST, a new indirect tax regime under which various levies would be subsumed into a single tax.

“States want resolution to their CST compensation demand. If demand not met, the states will not go ahead with the GST rollout. They also have an issue with the design of GST,” Madhya Pradesh Finance Minister Raghavji told reporters after the meeting of the empowered group earlier in the day.