New Delhi: After a meeting with Finance Minister Pranab Mukherjee on Tuesday, chairman of Empowered Committee of States on Goods and Services Tax, Sushil Modi, expressed confidence of the new tax regime being be implemented in April 2013.
"In my meeting with the finance minister, we discussed the entire GST issue and he was also positive on the issue of CST (central sales tax) compensation to states. If everything goes well I am confident that GST can be rolled out from April 2013," said Modi who is member of the Bharatiya Janata Party and is also the deputy chief minister of Bihar.
Modi had an hour-long meeting with the finance minister to thrash out issues holding up GST implementation.
GST will do away with multiple taxes by replacing the central excise duty, service tax and value-added tax at the state level. The implementation of GST has been delayed several times due to lack of consensus between the Centre and the states on the new regime's framework.
With the delay in the GST launch, the central government had informed states in March that they will not be compensated from 2011-12 (Apr-Mar) onwards for the reduction in the CST. The government had also said that the payout for 2010-11 would be restricted to the amount that had already been given.
While the states had demanded a compensation of 191 billion rupees for 2010-11, the Centre had released only around 64 billion rupees.
Central sales tax rate had been reduced to 2 percent in 2010 from 4 percent earlier, as part of the phasing out of the tax in backdrop of proposed GST.
Following the meeting with Mukherjee on Tuesday, Modi said the finance minister had agreed to form for a committee comprising of state and central government officials to deal with the CST compensation issue.
Modi has also asked the finance minister to convene an all-party meet on the compensation issue.