“All these issues which are related to mechanics of GST have to be
decided before we can finalise the model draft law for HGST, CGST and
IGST because all these will go into these three sets of laws which have
to be passed before GST can actually be implemented,” said Ms Rashmi
Verma, additional secretary (Revenue), Finance Ministry while
inaugurating ‘National Conference on Goods & Services Tax (GST)'
organised by The Associated Chambers of Commerce and Industry of India
(ASSOCHAM).
“We are now in the process of drafting this model law which will be shared with all state governments and they will have a very little choice to tinker with this model law,” said Ms Verma.
“Of course there can be minor changes which we can foresee otherwise the basic design of these laws will be common both for CGST and HGST laws which will be passed by each state,” she added.
She said that a number of committees are working on these issues and the Ministry is regularly having meeting of these committees. “The process is very democratic as we take into account views and concerns of both the Central Government and state governments and final decision is taken after a lot of discussions.”
Talking about the passage of the GST bill in the on-going winter session of the Parliament, Ms Verma said, “We have tentatively finalised the draft amendment bill and have sent it to the legislative department for vetting and we are hopeful that we will be in a position to introduce this bill in the on-going winter session.”
“We are yet to have consensus on three issues of inclusion/non-inclusion of petroleum products, entry tax and GST compensation funds and we are still having discussion with the states, the Finance Minister is meeting the state finance ministers on 11th December to iron out those differences and we are hopeful that with the final round of discussion with states we will be in a position to take a note to the cabinet and then finally introduce the bill in the winter session before December 24,” she added.
“Once the constitution amendment bill is introduced and passed we will be having a series of discussions and meetings with all stakeholders including the trade and industry and we will be going to different regions and we will have all states, all business entities on board,” she further said.
Ms Verma further said that as far as implementation of GST is concerned all states are on board and there is not a single state which says that we do not want GST. “Every state is in favour of implementation of GST at the earliest.”
“Our basic concern is that GST should bring about a definite improvement in ease of doing business therefore we're trying to simplify everything,” said the top FinMin official.
On the issue of states' concern regarding revenue loss owing to rolling out of GST, she said, “It is extremely difficult at this stage to say whether there will be actual revenue loss to any states or not but this is an apprehension of some of the manufacturing states because GST will become a consumption based tax they feel that with the abolition and phasing out of CST there will be a loss to those states.”
“We have currently set up a committee in which we are working ways and means of ensuring that there is an independent mechanism of flow of funds into an autonomous GST composition fund so that it is not on the mercy of the Central government to give compensation to the states there will be an independent mechanism on flow of funds and there will be a basic amount in that fund which will be used if there is a loss to the states to compensate those states,” said Ms Verma.
“This to a large extent has been accepted by many of states but of course there are certain states that are saying we will accept only if it is created through constitutional amendment,” she added.
“We are focusing that every transaction of every business process should be IT based and there should be minimum interface with any of the state or central authorities and most of the issues including some assessments we are looking to do it online to weed out of the system any question of harassment and it becomes user friendly, simple and uniform,” further said Ms Verma.
She also said that the real benefit of GST will come only if all goods and services are brought within the ambit of GST but there are certain compulsions under which the Government has to work and in order to roll out GST the Government will have to take all states on board by addressing their concerns.
She further said that there may be one or two items which will be kept out of GST, most probably it will only be alcohol otherwise the Government is still trying its best to bring in petroleum also.
“The Government of India is of the firm view that we should bring in petroleum not only because it is a major input in most of the industries but also because we want to benefit from the better audit and better compliance system which is going to come with the rolling out of GST,” said Ms Rashmi.
She also said that the Government has drawn up a very comprehensive training programme for all the stakeholders including the Government officials, trading community and others which will be involved in rolling out of GST.
“We are now in the process of drafting this model law which will be shared with all state governments and they will have a very little choice to tinker with this model law,” said Ms Verma.
“Of course there can be minor changes which we can foresee otherwise the basic design of these laws will be common both for CGST and HGST laws which will be passed by each state,” she added.
She said that a number of committees are working on these issues and the Ministry is regularly having meeting of these committees. “The process is very democratic as we take into account views and concerns of both the Central Government and state governments and final decision is taken after a lot of discussions.”
Talking about the passage of the GST bill in the on-going winter session of the Parliament, Ms Verma said, “We have tentatively finalised the draft amendment bill and have sent it to the legislative department for vetting and we are hopeful that we will be in a position to introduce this bill in the on-going winter session.”
“We are yet to have consensus on three issues of inclusion/non-inclusion of petroleum products, entry tax and GST compensation funds and we are still having discussion with the states, the Finance Minister is meeting the state finance ministers on 11th December to iron out those differences and we are hopeful that with the final round of discussion with states we will be in a position to take a note to the cabinet and then finally introduce the bill in the winter session before December 24,” she added.
“Once the constitution amendment bill is introduced and passed we will be having a series of discussions and meetings with all stakeholders including the trade and industry and we will be going to different regions and we will have all states, all business entities on board,” she further said.
Ms Verma further said that as far as implementation of GST is concerned all states are on board and there is not a single state which says that we do not want GST. “Every state is in favour of implementation of GST at the earliest.”
“Our basic concern is that GST should bring about a definite improvement in ease of doing business therefore we're trying to simplify everything,” said the top FinMin official.
On the issue of states' concern regarding revenue loss owing to rolling out of GST, she said, “It is extremely difficult at this stage to say whether there will be actual revenue loss to any states or not but this is an apprehension of some of the manufacturing states because GST will become a consumption based tax they feel that with the abolition and phasing out of CST there will be a loss to those states.”
“We have currently set up a committee in which we are working ways and means of ensuring that there is an independent mechanism of flow of funds into an autonomous GST composition fund so that it is not on the mercy of the Central government to give compensation to the states there will be an independent mechanism on flow of funds and there will be a basic amount in that fund which will be used if there is a loss to the states to compensate those states,” said Ms Verma.
“This to a large extent has been accepted by many of states but of course there are certain states that are saying we will accept only if it is created through constitutional amendment,” she added.
“We are focusing that every transaction of every business process should be IT based and there should be minimum interface with any of the state or central authorities and most of the issues including some assessments we are looking to do it online to weed out of the system any question of harassment and it becomes user friendly, simple and uniform,” further said Ms Verma.
She also said that the real benefit of GST will come only if all goods and services are brought within the ambit of GST but there are certain compulsions under which the Government has to work and in order to roll out GST the Government will have to take all states on board by addressing their concerns.
She further said that there may be one or two items which will be kept out of GST, most probably it will only be alcohol otherwise the Government is still trying its best to bring in petroleum also.
“The Government of India is of the firm view that we should bring in petroleum not only because it is a major input in most of the industries but also because we want to benefit from the better audit and better compliance system which is going to come with the rolling out of GST,” said Ms Rashmi.
She also said that the Government has drawn up a very comprehensive training programme for all the stakeholders including the Government officials, trading community and others which will be involved in rolling out of GST.
