PM Modi takes stock of GST, Bill likely in winter session

Keen to push the GST Bill in the winter session of Parliament, Prime Minister Narendra Modi today took stock of the proposed new indirect tax regime and decided to soon clear the pending CST compensation for revenue loss incurred by states."Will make all efforts to introduce the Constitutional Amendment Bill for GST in the next parliament session," said a senior government functionary, who attended the meeting called by the Prime Minister to review progress towards implementation of Goods and Services Tax (GST).The GST regime aims at subsuming most of the indirect taxes at the central as well as states' level. The UPA government in 2011 introduced a Constitution Amendment Bill in the Lok Sabha to pave the way for introduction of GST. In the meeting, sources said it was also decided to soon clear the compensation dues to state governments related to phasing out of Central Sales Tax (CST)."Some movement on CST compensation soon. We are looking at disbursing compensation arrears soon," the official said. Clearance of CST compensation arrears has been a bone of contention between Centre and states. As part of the roll out of GST, the CST is being phased out and has been reduced to two per cent from the earlier four per cent. The Centre collects CST and distributes it among states.Last month, Kashmir Finance Minister and Chairman of the Empowered Group of State Finance Ministers Abdul Rahim Rather had said Rs 13,000 crore has been pending as CST compensation with Centre as on March 2010. Sources further said the Centre may also agree to keep petroleum products out of the GST network though it will not be a "constitutional right". States have been demanding that these products should be kept out of GST as including them would impact their revenue."Petroleum products may be kept out GST chain but not as constitutional right," the official said, adding "the tax rates are likely to remain same even as India moves to GST regime".Among others, the meeting was attended by Finance Minister Arun Jaitley and top officials of his ministry. While presenting the Budget, Jaitley had expressed hope that the government will be able to "bring a final solution in the course of this year and approve the legislative scheme which enables introduction of GST".GST, he had said, would streamline tax administration and avoid harassment of business and result in higher tax collection both for Centre and States.