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Goods and Service Tax legislation : Finance Minister
January, 11th 2010

Finance Minister Pranab Mukherjee said the legislation regarding the omnibus Goods and Services Tax (GST) was likely to be introduced in the second half of the year and the government at the moment was engaged in evolving a consensus on the issue.

In an informal chat with newsmen here, Mr Mukherjee said growth of the Indian economy could touch 8 per cent by March 2010 as compared to 6.7 per cent in the previous year.

On whether a constitutional amendment to the GST Bill would be tabled in the budget session of Parliament, Mr Mukherjee said it was unlikely.

Getting consensus on a constitutional amendment will take at least seven to eight months, he said.

The Union Finance Minister had a meeting with Mr Asim Dasgupta, Chairman of the Empowered Committee of State Finance Ministers.

Two crucial points emerged from these discussions. First, related to losses incurred by states on account of reduction in Central Sales Tax.

Mr Mukherjee proposed that 50 per cent of losses incurred by States be borne by the States themselves and the Centre will give only 50 per cent compensation.

Secondly, Mr Mukherjee asked the Empowered Committee to prepare a complete package and report to him by the end of this month. The package could include revenue neutral rate, tax base, tax exemptions and the amendment to the constitution relating to the introduction of GST.

Mr Mukherjee said the economy was generally looking up and signs were good.

 
 
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