Government still hopeful of introducing GST next year

The much-delayed goods and services tax (GST) could be introduced in the middle of next year as the government doesn not want to delay the ambitious indirect tax reform by another year, according to a report. Its planned rollout from April next year now looks virtually impossible due to opposition from BJP-ruled states, which fear erosion of their fiscal autonomy.

''A realistic date for the rollout could be 1 June 2011 in view of the time needed for legislative processes,'' The Economic Times cited an unnamed finance ministry official involved in the process of developing a framework for the new regime as saying. ''The idea is to ensure that it does not get delayed further, as this could result in loss of momentum.''

The GST aims at creating a seamless pan-India market by replacing a number of levies at the national and state levels by a single tax. This will need many constitutional amendments, which are opposed by opposition-ruled states.

The constitution amendment bill has to be approved by both the houses of Parliament and at least 15 state assemblies.

The finance minister said last week that he will not introduce the constitutional amendments required for the indirect tax reform in Parliament until there is wide consensus on the matter.

Senior officials of the revenue department and the Central Board of Excise and Customs, the apex indirect taxes body, held a meeting late Friday to take stock of the situation. ''The consensus view was that there should not be any let-up in the preparatory work because of the constitution bill not being introduced in the monsoon session,'' said an official present at the meeting, according to the report.