Panels to look into CST payout, GST design issues, says FM


Finance minister P Chidambaram today said that two committees will be formed to look into all the issues pertaining to Central Sales Tax (CST) compensation and the design of the proposed Goods and Services Tax (GST).

The committees, to be formed by chairman of the Empowered Committee (EC) of state finance ministers, Sushil Modi, will submit their report by December 31, the finance minister said.

"The (CST compensation) issue has to be addressed. Compensation is being paid for about two years and then partially for third year but then compensation has not been paid subsequently. That issue has to be addressed. We can't duck that issue," Chidambaram said after meeting the EC today.

He added that addressing the two issues is essential to ensure the implementation of the new indirect tax regime. This was the first meeting of the finance minister with the EC after taking over the finance portfolio in August.

"The other issue is the design of GST. All states support GST without exception. All of them said we support GST but we would like to discuss the design of GST," he said.

The committees will have members from both the state and the Centre. Earlier, the EC had also formed a committee for discussing the issue of CST compensation. Once the reports are submitted, the finance minister would again meet the EC in January next year to take the dialogue forward.

The implementation of the new indirect tax regime has been deferred twice given the lack of consensus between the states and the Centre. While the states want to retain their fiscal autonomy and administrative control, according to the GST design prepared by the Centre, a proposed GST council will decide upon the tax rates and other related issues.

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