GST may yet happen: states offer alternative format

The states have suggested an alternative constitutional amendment plan to implement the goods and services tax, or GST, creating the possibility of breaking the deadlock in their talks with the centre on this ambitious indirect tax reform.

The empowered committee of state finance ministers, meeting in Goa's capital Panaji on Friday, proposed that the dispute settlement mechanism and provision for creation of a GST council as suggested by the centre be dropped, as it formally conveyed its alternatives to the constitutional amendments suggested by the finance ministry.

There was a consensus that the proposed GST Council would be formulated in such a way that the central government was accommodated and the autonomy of the states was also maintained, committee chairman and West Bengal finance minister Asim Dasgupta told presspersons after the meeting.

He said the GST council would be a recommendatory body with the union finance minister as its chairman, one of the state finance ministers as its vice-chairman, and all finance ministers of states as members.

As regards the eventual dispute settlement authority contemplated through an amendment of Article 246A of the Constitution, Dasgupta said they were contemplating two options - one, to have an authority completely under the state legislature as regards the state GST and under Parliament as regards the central GST; and two, to have a basic Constitutional amendment in place to start GST referring the disputes to the GST council, give it a try, learn from the experience and then go for a dispute settlement authority under Article 246 with a Constitutional amendment subsequently.

He said this is because some states have reservations in regard to the dispute redressing mechanism, and ''we are listening to them and trying to have a good convergence''. For the present, the committee would forward the two options to the union finance minister.