New Delhi, Aug 18 (IANS) Finance Minister Pranab Mukherjee Wednesday urged his counterparts from states to work toward meeting the April 2011 deadline to start the pan-India goods and services tax regime, saying concerns can be resolved through dialogue.
‘We must make all efforts to meet the timelines we have set for ourselves,’ the finance minister told the empowered committee of state finance ministers on the new indirect tax regime to replace the central sales tax and other state levies.
‘It must be appreciated the constitutional amendment is only an enabling provision. It does not prohibit us from continuing our dialogue on rates, exemptions and other issues related to goods and services tax,’ he said.
‘Both the activities can go on parallely,’ the finance minister added, alluding to the effort to introduce the amendment in the current session of parliament so that it goes through the due process of getting ratified by a committee and then by majority of the states.
Mukherjee’s comments came against the backdrop of the concerns of states – the role of proposed the council on goods and services tax and the so-called veto power proposed for the federal finance minister as the chairperson of this council.
‘It was the perception of some of you that the proposal has the effect of granting primacy to the council over the legislature. I would like to emphasize that in a parliamentary democracy such as ours this can never be the case,’ he said.
‘The primacy of the Legislature in the area of taxation is supreme and inalienable and the proposed draft did not seek to disturb or alter this in any manner.’
He said the reason why the constitution leans slightly in favour of the federal government over states is because the Indian economy suffers from acute regional imbalances where the revenue-raising potential of all states are not similar.
‘It was in this background that the scheme of functioning of the goods and services tax council in the proposed draft envisaged a slightly larger role for the Centre vis-a-vis the states,’ he said.
‘The priority for now is the finalisation of draft constitutional amendments so that the amendment bill may be introduced in parliament during the ongoing monsoon session. This is critical for meeting the April 2011 deadline.’
