The Centre has asked the Empowered Committee of State Finance Ministers to consider bringing petroleum and liquor within the Goods and Services Tax (GST).
This is a part of the revised draft of the Constitutional Amendment Bill. Now, the Empowered Committee has announced setting up a sub-committee to study the proposal.
“We have decided that detailed discussions will take place in the next meeting in Meghalaya,” Chairman of the Empowered Committee Abdul Rahim Rather told reporters here.
In the revised draft of the Bill circulated to States, the Centre has proposed that these items should not be constitutionally debarred. The Government has circulated the revised draft after incorporating the proposals of the Parliamentary Standing Committee on Finance, which submitted its report last month.
The Standing Committee, last month, had recommended that GST be made optional for States and must have a well defined compensation system. The committee had also recommended that exclusions be kept to a minimum for an ‘integrated, comprehensive and seamless’ GST regime.
Rather, who is the Finance Minister of Jammu and Kashmir, said the sub-committee, which consists of Central and State Government officials, will give suggestions on reconciliation of the standing committee’s recommendations, the revised draft of the concerned Bill, and the decisions taken by States in their meeting in Bhubaneswar in January over the design of GST.
“This sub-committee will come up with its recommendations before the next meeting of the Empowered Committee,” Rather said. Though the States had earlier agreed to include petroleum under GST in the Constitution, there was no such agreement on liquor.
The GST rollout, which will empower the Centre and States to simultaneously tax the supply of goods and services, has missed several deadlines due to differences between some States and the Centre over the contentious issue of central sales tax compensation and GST design.
The Constitutional Amendment Bill was introduced in Parliament in 2010. The Government hopes to table it in the Winter Session of Parliament.