Public CompanyGST introduction may be delayed by up to a year
The government may not have come out clearly on introduction of the proposed indirect tax structure GST but the lack of preparedness for the new tax regime hints at a possible delay by up to a year.
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Implementation of the new tax regime would require constitutional amendments for empowering states for levy of service tax, GST on imports and others-- the draft bill for any of these amendments were not tabled in this session of Parliament.
Now, Parliament will meet for the budget session in February when the draft bills for introduction of GST may be tabled.
The Task force of Thirteenth Finance Commission in its report on Goods and Services Tax had said, "On account of lack of adequate preparedness, the implementation of the GST scheduled for 1st April, 2010 should be postponed by six months to October 1, 2010."
However, the Empowered Committee of State Finance Ministers in its draft paper on the GST said the committee would work with the Centre to implement GST with effect from April 1, 2010.
Earlier this month, Bihar Finance Minister Sushil Modi said that the introduction of GST should be delayed by a year as there is not enough preparedness to implement it on the scheduled date.
Though, tax experts feel that GST can be rolled out in six months time.
"I do not think implementing it in October would be difficult. It can be done at that time but I do not think its is possible to implement it by April 1 next year," financial consultancy KPMG Executive Director Indirect Tax Pratik Jain said.
The Finance Commission, in its report had said that the government should announce the timeline of various activities for introduction of GST simultaneously with the announcement for postponement.
GST, the proposed indirect tax structure aims to do away with most of the indirect taxes levied at the Central level like excise and service tax and also at the state"s behest like VAT and octroi.