True to its promise, the finance ministry is likely to start preparing a road map for the goods and service tax from next month. Sources said the ministry would formally hand over the work to the empowered committee of state finance ministers during their next meeting, scheduled for next month. A notification to this effect will also be issued.
The main work of the empowered committee will be to work out a feasible model for introduction of GST, which would take into account the countrys quasi-federal nature.
Tax experts are of the view that for an effective GST regime, both the Centre and state level indirect taxes need to be harmonized as world over goods and services attract the same rate of tax. The committee would be expected to work out a system for this, sources said.
The finance ministry is also keen to levy GST at the rate of 20%, which would be in line with the international practice. However sources said, the final decision would rest with the empowered committee.
A North Block official said, While we have another three years, before the tax is introduced, we would like to have a broad consensus on some issues by the end of this year. The recommendations of the Kelkar committee and the Shome committee would also be kept in mind.
The move would be in line with finance minister P Chidambarams Budget time announcement to hand over the work for GST to the empowered committee. The decision to hand over the work to the empowered committee was taken as it was felt that a consensus amongst states was essential for any kind of move towards GST. The best way to achieve this would be by handing over the work to the committee.