The decision to not roll back fiscal stimulus in the Budget by keeping excise duty rate unchanged may be to send “clear signal” that the government was committed to Goods and Services Tax, yet the far reaching indirect tax reform measure will not be rolled out even on April 1,2012.
Unveiling the Budget in Parliament, finance minister Pranab Mukherjee said as a step towards the roll-out of GST, “I propose to introduce the Constitution amendment bill in the current session of Parliament.”
“Work is also underway on drafting of the model legislation for the central and state GST,” Mr Mukherjee said. GST is aimed at replacing excise, customs and service tax of the centre and value added tax and other state leveies, has two components — central GST and state GST. Revenue secretary Sunil Mitra told a post-Budget press conference that even if the Constitution amendment bill is introduced in the Budget Session, it is unlikely that the bill will get passed before the next Budget Session in 2012. Mr Mitra said the bill will most probably be referred to a Parliamentary Standing Committee after its introduction which meant that the earliest the committee will come out with its recommendations only by winter session of Parliament in November-December.
But Mr Mitra said GST need not be implemented from the beginning of a financial year in April as is the case with direct tax code.
The earliest it could be implemented is June 2012. On DTC, Mr Mukherjee assured that the government would finalised the DTC for its enactment during 2011-12 so that tax reform measure come into effect from April 1, 2012.