Bihar deputy chief minister Sushil Modi, who heads an inter-state panel on goods and services tax, on Saturday indicated that the much-hyped measure would take more time to be implemented, saying no government would bring the taxation reform ahead of Lok Sabha elections.
But he also said that the empowered committee of state finance ministers headed by him is “moving fast in a positive direction”.
Modi, who was addressing an event organised by an industry body here, termed finance minister P Chidambaram as “a very flexible person” and thanked him for understanding the concerns of the states.
“I cannot say whether such a big reform can be implemented a year before (Lok Sabha) elections...I don’t think that any government in its last year will (implement) this type of taxation reform. It is not such a reform that commodities will become cheaper for the people. It will take two-three years’ time for it to show results,” he said.
Modi also said the process of implementing the GST Act, which entails a constitutional amendment, was not easy. “The amendment will have to be ratified by over 50% of the state legislatures. If the interests of the states are ignored...no state government would allow encroachment on its fiscal autonomy,” he said.
He said even if the bill is introduced today, it will take one-and-a-half year to implement GST. He hoped that the government will incorporate the issues related to the interests of states once the report of the parliamentary standing committee on finance is tabled.
He said while the parliamentary panel is examining the measure, his committee is trying to work on the differences of the states on the “design of GST”.
The bill on GST was introduced in Lok Sabha in March last year. The government hopes that the measure will be passed by March 2013.
It will replace all indirect taxes levied on goods and services by the Centre and the state governments.