By IANS,
New Delhi : The alternative models of goods and services tax (GST) suggested by the empowered group and Bharatiya Janata Party-ruled states like Madhya Pradesh and Gujarat is not acceptable as it is not consistent with the basic structure of the proposed tax reform, Revenue secretary Sunil Mitra said Wednesday.
“We don’t find these suggestions acceptable. It is not consistent with the basic structure. It will not allow essential features of GST to operate,” Mitra told reporters on the sidelines of a conference organised by Confederation of Indian Industry.
The empowered group of state finance ministers headed by West Bengal Finance Minister Asim Dasgupta and BJP-ruled states have suggested alternative models of GST.
The panel headed by Dasgupta has suggested that states be allowed to levy service tax without constitutional amendments. Madhya Pradesh has also proposed that states be allowed to impose service tax without amendements.
“We have regretted our ability to accept their demand including the proposals of empowered group,” said Mitra.
Asked whether the centre has rejected all the alternative proposals, he said: “We have clearly said that proposals are not acceptable because it won’t allow essential features to operate. It’s not a matter of rejection.”
Mitra said the empowered group would meet by the end of October to build a consensus on the proposed tax reform that would allow goods and services tax to be shared between the centre and the states.
The GST is to replace the central excise duty and service tax, and the value added tax (VAT) of the states, besides local levies, cesses and surcharges.
Its implementation will in all likelihood miss the scheduled deadline of April 1, 2011 as there is no consensus on the issue between political parties.