Goods and Services Tax to be in place by 2014, says Sushil Modi

Chairman of the Empowered Committee of State Finance Ministers on Goods and Services Tax (GST) Sushil Kumar Modi is optimistic about the legislation being in place by 2014.

Prime Minister Manmohan Singh too recently assured Japanese industry that the long-awaited regime, which is facing hurdles from states, will be in place in an "appropriate type" by 2014.

"GST is an important tax reform and I am confident it will come into being in 2014 irrespective of whether UPA or NDA forms government at the centre after general elections," Modi, who is the Deputy Chief Minister and the Finance minister of Bihar, said.

He, however, blamed the UPA government for delay in implementation of the important tax reform.

"For the last three years the GST is lying with Parliamentary Standing Committee in which Rahul Gandhi is a member... The UPA II hardly did anything for implementation of GST," Modi said. "No positive steps were taken in UPA I for building consensus among states on GST... Things have started moving with regard to GST in the last one year after P Chidambaram became Union Finance minister."

Implementation of GST, which will subsume most of the indirect taxes, has missed several deadlines.

Modi dismissed that opposition to GST was for political reasons, saying the states were mainly bothered about loss of revenue.

"Even Congress ruled states like Haryana and Maharashtra are opposed to it fearing loss of revenue," he added. "The main issue for implementation of GST is that the Centre has to draw a mechanism to protect revenue loss to states (due to GST) at least for initial five years."

Talking about roadblocks on way to GST, Modi said it cannot be in place without GST network for which a IT network was required. "The UPA government has not done enough in this direction also."

With inputs from PTI