Punjab likely to give nod to GST by September

GST India

NEW DELHI: With and many other NDA-ruled states expected to ratify the Constitution amendment bill to roll out goods and services tax+ () by early September, the Modi Government is now moving to the next stage — deciding on the contentious issue of fixing the rates — so that the ambitious reform initiative is in place by April.

Sources said the finance ministry is set to hold consultations on the GST rate – which several states suggest should be upwards of 20% to protect their revenue – as well as the other legislations which need to be cleared by Parliament during the winter session for the new tax regime to kick in from April.

Once 16 states ratify the Constitution amendment, and the President notifies it, the stage will be set for formation of the GST council, which will be the authority on deciding rates. Once the rates are decided, the upper limit will be included in the bill that will be moved in the Centre.

At least eight states have already shown+ the green flag to the Constitution amendment bill that was approved by Parliament. To ensure implementation of GST, the bill needs to be ratified by at least half the 29 state assemblies. It is set to cross the halfway mark comfortably despite the lukewarm response from some non-NDA ruled states.

Several states have convened special sessions of their state legislatures to discuss the Constitution amendment bill on GST. Rajasthan is expected to give its nod during the assembly session that has been convened from September 1.

The proposed levy will be a single tax that will cover all levies at the Centre and state levels, including entry tax. It is a value-added tax, which means a levy at each stage of production, sale or consumption will be set off against taxes paid in the previous stage. It is expected to benefit consumers and help government revenues and add to overall economic growth.

Three non-NDA ruled states — Himachal Pradesh, Bihar and Delhi — have approved the bill. Kerala and Uttarakhand have convened special sessions to give the go-ahead. NDA-ruled Maharashtra too is expected to join the list of approvers at the one-day session on August 29. Some non-NDA states, especially Tamil nadu ad West Bengal are still dragging their feet.