Karnataka - Bangalore   

Put off proposed GST till April 2011, says expert

BANGALORE: The implementation of the proposed goods and service tax (GST) regime, which is scheduled to come into force from April 2010, should be postponed to April 2011, as several issues are yet to be sorted out, said Director of National Institute of Public Finance and Policy M. Govind Rao.

Speaking here at the third anniversary celebrations of large taxpayer unit (LTU) of Union Ministry of Finance on Thursday, Mr. Rao said that in the light of many tricky issues that need to be resolved, it was appropriate that the implementation of the GST regime be postponed to 2011 April. Proper preparation was needed to implement a new regime, and mistakes committed in the past should not be repeated, he said.

“Compensation formula (between the Centre and State Governments) is yet to be worked out, legal and constitutional changes are required and information system for inter-State transactions is yet to be put in place. Besides, exemption list is yet to be finalised, and disagreements over exemptions are also increasing,” said Mr. Rao. He, however, pointed out that there were indications that the implementation could be postponed to October 2010.

He pointed out that the dual GST regime that India was proposing to have wherein both the governments can impose tax , was not the best solution. However, given the fiscal autonomy that the States seek in the federal system, the dual GST was a possible way out, he added.

Created three years ago to provide service to large tax payers from manufacturing, infrastructure, informational technology, banking and other service sectors, the LTU in Bangalore has grown from 28 assessees and a revenue of Rs. 2,093 crore in 2006-2007 to 59 assessees and a revenue of Rs. 4,402 crore. Chief Commissioner of LTU Subash Chander and Chief Commissioner Customs Lalitha John were among those present.

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