The Central Board of Excise and Customs (CBEC) has indicated that the concept paper on the negative list might have some impact on the Budget for 2012-13. It could include new services in the list of service tax. In a freewheeling interview, the CBEC Chairman, Mr S. Dutt Majumdar, also hoped that discussions on the concept paper will be over by October 31. Excerpts from the interview:
Given that GST is unlikely to be rolled out from April 1, 2012, can this concept paper of the negative list of services have an impact on the Budget for the financial year 2012-13?
It is too early to say that. Right now, I cannot say that GST will not roll out in 2012-13; it might. But whether this list can be taken in the budget before GST will be decided only when the Budget-making exercise happens. This is not the right time to discuss it. The issue is — are we getting prepared for all the options? And this exercise was undertaken, if you recall, after our FM made an announcement in the Budget. It is a very critical issue.
When we discussed the issue informally, the industry chambers including CII, FICCI and Assocham wanted the negative list. Internationally also, most of the countries have the negative list. So ultimately, we expect that the stakeholders would go for the negative list.
I must clarify that we are only having a debate on the negative list. There are two questions — one, whether we will wait for GST to come. After we more or less determine the negative list, on the basis of feedback from the stakeholders, it will be shared with the state finance ministers, only then will a final negative list come.
There can be a negative and a positive list and it may be a good idea for it to be implemented before the roll-out of the GST.
A call on this will be taken only when the budget exercise begins, not now, so it will take a little time. So, that is also a possibility. In that case, we do not have to consult with the States. The Centre can do that itself before the GST roll-out.
The concept paper says that it is to help finalise the approach paper towards the GST. With a change in the Empowered Committee, there is a feeling that we may not catch the time-line. What is the latest on implementation of GST?
There are so many things to be done. Work is going on. First, legislation has to be done. The Finance Minister has constituted a taskforce under former board official Mr Gautam Ray for this. This taskforce has given a draft discussion paper on the business processes, such as who is a taxable person and what is the supply of goods and services. These issues are being discussed internally now. After that, we will give it to the empowered committee of the states' finance ministers.
After we reach agreement on business processes, the legislation will start. Once the model legislation is ready, we can prepare for SGST and CGST. This is the policy part.
This will be followed by IT preparedness. As you know, the GST net has already been approved. Now, a Cabinet note will be prepared. And on that basis, things will be formalised. Work is going on for this. Not that GST is not ready now, some experimental work is being done.
You will be approaching the states withthe suggestions on the negative list. Will you also take suggestions from the states?
We will take suggestions from the states. There has to be consensus. But if we decide to have it before GST, we do not need state consensus for that.
Let us talk about two specific issues in the concept paper, tolling and betting, both of which are state subjects. If you want to bring them under GST, you will have to take the states' consent. Will you go to the states to bring some of the services under the positive list?
We will not. Absolutely, we are not going to touch anything which is not in the domain of the centre.