Budget Analysis: GST may go through before next fiscal, says Hero's Munjal

The much anticipated Goods and Service Tax (GST) has missed yet another deadline. The Finance Minister today announced that a draft bill on GST will be presented in the Parliament in next few months.

It was expected that FM might set April 1, 2014 deadline for the implementation of the new tax regime. Sunil Munjal, MD, Hero expects the GST to get approved before the end of the next fiscal. Reacting to Union Budget 2013, Munjal told CNBC-TV18 that after slew of meetings between the finance ministry and various other ministries the mood is upbeat. Given that the Finance Minister has earmarked Rs 9,000 crore for compensating state governments in case of any loss due to the change in tax structure following the implementation of the goods and services tax (GST) raises the possibility of it becoming a reality going ahead. Below is the edited transcript of Sunil Munjal’s interview with CNBC-TV18 Q: As far as the goods and services tax (GST) is concerned, he has made a first installment budgeted Rs 9,000 crore saying that this is my way of getting the state to come on board, do you see GST being a reality, do you think that by the winter session perhaps, we can see him bring in the constitutional amendment bill and the GST bill? A: In the last eight-ten weeks, there have been a series of meetings between the states, the empowered committee, the finance ministry and the finance minister that general mood and movement seems to be good. I am hoping it will happen before the end of the next fiscal which is what he is indicating and that is why he is putting Rs 9,000 crore out there. If it does, it has a very good multiplier effect both on growth and on revenues. Q: This is the government going into an election, this is a government trying to convince state governments where a whole host of them – it is not Congress led, do you believe that state governments are going to want to hand them the GST on a platter in this fashion? A: The state governments will not hand it to the center. The state governments will get what they want of it and then accept it. It is going to be good for both sides. They may end up putting out more money than they had planned but it will work.