Mukherjee urges industry to back GST
23 Jul 2010
Finance minister Pranab Mukherjee on Thursday made a strong appeal to corporate India that it should try to convince political parties and state governments to back the goods and services tax (GST) scheduled to be implemented from 1 April next year. A day earlier, he had offered a sweetened deal to states to push through the key indirect tax reform.
''I seek your support. This tax is a win-win,'' Mukherjee said at the national executive meeting of industry body FICCI. ''I request you to convince the states and political parties to arrive at a consensus on the constitutional amendments needed to implement this major national reform.''
Not only does a constitutional amendment require the support of two-thirds of parliament members present at the voting, it also needs to be ratified by at least 15 state assemblies, for which the support of all parties is needed.
The minister said he had assured the state governments that they would be compensated for any revenue loss from the GST rollout.
He also asked them to convince their respective political parties on the need for amendments, the details of which were given to them on Wednesday. He pointed out that the BJP, the main opposition party, had in its 2009 election manifesto said it would implement GST at 12-14 per cent if voted to power.
On apprehensions expressed by certain states over loss of fiscal autonomy under the GST, Mukherjee said he told state finance ministers that even the centre was giving up its power to raise tax rates. ''I have told them when I subsume excise duty in the GST, I also surrender the authority to raise tax rates to you,'' Mukherjee said.
