The Hindu Business Line : Govt working on Constitutional mechanism for new tax regime

Though the new tax regime envisaged a uniform tax structure across the country, it would still let the States to retain some powers to decide on the tax rates.

Our Bureau

Hyderabad, Nov. 13 With the GST (Goods and Services Tax) regime getting ready for the tentative April 1, 2010, launch, the Union Government is working on two tasks to meet the Constitutional requirements to facilitate the launch of the uniform tax structure.

The first one is related to the amendment to the Constitution as the new tax regime needs to take care of the sales tax, Central sales tax and services tax – on which States and the Centre are vested with statutory powers.

“The first draft is ready and is being vetted by the Law Ministry,” Mr S Dutt Majumder, Member (Central Excise) of the Central Board of Excise and Customs, said.

The amendment is likely to come up before Parliament in the ensuing winter session.

The Government had released the First Discussion Paper on GST on Tuesday, seeking the views of the stakeholders on the new tax structure ahead of its launch. Addressing a gathering on GST at the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) here on Friday, he said the Government was also working on a Constitutional mechanism to address the crucial issue of fiscal federalism.

Though the new tax regime envisaged a uniform tax structure across the country, it would still let the States to retain some powers to decide on the tax rates.

“The federal nature allows the States to deviate. But how far they can go on this is a question. To address this issue, the Government is working on a Constitutional mechanism with representatives from the States and the Centre to review the permissibility of the said deviations,” he said.

The new system also allowed the States and Centre to retain some exemptions even after its implementation.

More Stories on : Taxation | Andhra Pradesh

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page