Finance ministry starts consultations for the Budget 2011-12
December, 07th 2010
The finance ministry on Monday started consultations for the Budget 2011-12 and held a meeting with industry chamber PHDCCI which said the Centre should end deadlock with states over GST, even as the Empowered Committee failed to make headway on the proposed tax regime.
In a meeting with revenue secretary Sunil Mitra, PHDCCI called the Centre not to tinker with indirect tax rates in the Budget.
The government should not be tinkering on indirect tax rates but push for implementation of GST at the earliest, PHDCCI president Ashok Kajaria said in a statement issued after the meeting.
He said Direct Taxes Code (DTC) and GST will simplify tax structures by removing current inefficiencies and distortions and provide a more enabling environment for the Indian corporate sector to contribute to Indias growth story.
PHDCCI asked the government not to let the impasse on GST stay for long and complete the legislative process for the implementation of GST at the earliest so that the proposed regime could be rolled out from April 1, 2012.
The chamber statement indicated that it is also unsure of rolling out of GST from any time next fiscal.
The fate of GST, which will subsume VAT, excise duty and service tax, besides local levies, surcharges and cesses, hangs in balance with the states and the Centre yet to come on a common ground over a number of issues.
Meanwhile, Mondays meeting of the Empowered Committee was attended by just eight state finance ministers and they also put off constitution amendments, required to roll out GST, and the rate structure to the next meeting.
GST was scheduled to be rolled out from this fiscal, but after differences between the Centre and states over its rate structure, the Union Government said it would make efforts to introduce it from April 1, 2011.
Now it is likely to miss this date as well, while the new timeframe has yet not been set. When asked about any revised timeframe, Empowered Committee chairman Asim Dasgupta said, We want to mention that in more precise terms after our meeting with the Union finance minister.
The chamber also asked the government to refrain from changing indirect tax rates in the Budget. If it happens, the government will be putting on hold withdrawal process from the stimulus it provided to the economy in view of the global financial crisis.
Even then, it wanted the government to continue with fiscal consolidation process, started in this fiscals budget.
The chamber also focussed on step up in public investment in agriculture, National Food Security Mission etc.