The Centre has to clarify on the mechanism to be followed in the implementation of Goods and Services Tax (GST), Andhra Pradesh Finance Minister Yanamala Rama Krishnudu said.
The Empowered Committee (of state Finance Ministers on GST) will meet soon in Delhi to settle the pending issues in its implementation, he told reporters here. "Almost all states have agreed on the implementation of GST, but there are some issues which are to be resolved by the union government," the minister said.
With the implementation of GST, the states will lose their revenue and the Centre has to compensate the loss, he added. The states generally take up development schemes and spend about 80 per cent of the funds on them. So, to meet such expenditure, the union government has to provide more funds to the states, Krishnudu said.
"I hope the GST would come into force from next financial year as expected," the state minister said. The Centre and states have completed the drafting of model GST law as well as an integrated-GST or iGST law, which will be put up in public domain by early November. The government had planned to bring in the GST, which is touted as the most comprehensive indirect tax reform since Independence, from April 1, 2016, but it seems difficult as the Constitution Amendment Bill to roll out the GST has been passed in Lok Sabha, but is awaiting clearance from the Rajya Sabha, where the ruling NDA lacks majority.
The government, however, is going ahead with preparatory work necessary for smooth implementation of GST, which will subsume various levies like excise, service tax, sales tax, octroi, etc, and will ensure a single indirect tax regime for the entire country. The Centre has already put up three reports of Empowered Committee on GST on refunds, payment process and registration for public comments by October 31.