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Adopt a flexible approach, new GST panel chief tells Centre

Our Bureau New Delhi | Updated on March 12, 2018

The Union Finance Minister, Mr Pranab Mukherjee, with the new Chairman of theEmpowered Committee of State Finance Ministers on GST, Mr Sushil Modi, at a meeting in the Capital on Friday. — Kamal Narang   -  Business Line

Flags six major concerns of States

Adopt a flexible approach. These were the first words of the newly appointed Chairman of the Empowered Committee of the State Finance Ministers, Mr Sushil Kumar Modi. He wants the Centre to be flexible in the implementation of the Goods and Services Tax (GST). The Centre plans to introduce a new system of indirect taxes from April 1, 2012.

“If the Centre is not flexible, then it will be not be easy to bring States on board,” said Mr Modi, who is the Deputy Chief Minister and the Finance Minister of Bihar. The first BJP Minister to head the empowered committee also advised the Centre that “the States' concerns should be addressed first”.

Mr Modi was elected unopposed, on Monday, to the post of Chairman, which had been lying vacant for the last four months since the defeat of the previous Chairman, Mr Asim Das Gupta, in the West Bengal elections. Mr Modi is likely to chair the first formal meeting of the committee in mid-August.

According to the new Chairman, the foremost issue worrying most of the States was the provision relating to the GST Dispute Settlement Authority in the Constitution Amendment Bill. States were opposed to this, as they felt that such an authority would undermine their autonomy.

The second worry of most States was whether they would have the flexibility to levy cess during natural calamities or State-level emergencies. For coal producing States such as Jharkhand, Orissa, Chattisgarh, he said, a key demand was that coal should be kept outside the purview of the GST.

Mr Modi pointed out that Maharashtra and West Bengal wanted a provision of entry tax in lieu of octroi. Floor rates were also another concern. Mr Modi said that States did not want the Centre to decide the floor rate. “There should be balance between autonomy and harmonisation,” he said.

Mr Modi said that States were worried about compensation issues following the reduction of Central Sales Tax. They had flagged the concern that there were no guidelines issued for FY 2011-12, while for FY 2010-11, just 50 per cent of the amount had been released.

>shishir.s@thehindu.co.in

Published on July 19, 2011

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