Arun Jaitley to meet state FMs on Dec 11 to discuss Goods and Services Tax

Finance Minister Arun Jaitley will meet his state counterparts on Thursday (December 11) to iron out the challenges in rolling out the Goods and Services Tax (GST).

In the meeting, the FMs would discuss some of the challenges that the states see at this point of time, Minister of State for Finance Jayant Sinha told reporters on the sidelines of Delhi Economics Conclave in the national capital on Wednesday.

"On GST we are working on variety of discussions with the states. The legislative aspects of the GST are complicated, they have to be approved by the states. CST compensation is one of the item which is under discussion," Sinha said.

The government is working towards rolling out the GST from April 1, 2016, and is in discussion with states to insulate their revenues from the impact of the new indirect tax regime.

The GST will subsume indirect taxes like excise duty and service tax on the central front and value added tax (VAT) and local levies at the States-level.

Sinha said once the issues are resolved the Centre can come up with the legislative calendar.

The GST Constitutional Amendment Bill, which was introduced in the Lok Sabha in 2011, had lapsed and the Prime Minister Narendra Modi-led National Democratic Alliance (NDA) government will be required to come up with a fresh Bill.

The GST roll out has missed several deadlines because of lack of consensus among states over certain crucial issues on the proposed new tax regime. For instance, States have been demanding that petroleum, alcohol and tobacco be kept out of the purview of the GST.

On easing restrictions on gold imports, Sinha said the intention of the government was to enable the jewellery sector function efficiently.

On economic indicators, the State finance minister said the current account deficit (CAD) and foreign exchange reserves are in much more comfortable position now, adding that the rupee was also stable.

The CAD, which is the difference between inflow and outflow of foreign exchange, moderated to 1.9 per cent of gross domestic product (US $17.9 billion) in the April-September period of teh ongoing financial year.

CAD stood at 3.1 per cent of GDP (US $26.9 billion) in the corresponding year-ago period.

The government had, in November, scrapped the 80:20 scheme for gold imports, which mandated the export of at least 20 per cent of the imported gold before bringing in new lots.

Gold imports jumped 280 per cent to US $4.17 billion in October, as per the latest trade data. The in-bound shipments touched 95 tonnes in September 2014 as against 12 tonnes in the previous year.