Department Of Trade And Taxes

States will use the IT platform of GST for collection of value added tax (VAT) till the new indirect tax regime comes into effect, the Chairman of Empowered Committee of State Finance Ministers, Sushil Modi, said today.

The GST Network (GSTN), he said, is likely to be operational by September this year and would be used by states for VAT collection purposes till GST is rolled out.

"It will help in checking tax evasion," Modi told reporters after the meeting of the committee.

He also expressed hope that the Constitution Amendment Bill for Goods and Services Tax (GST) would be cleared by Parliament and also rectified by some of the state assemblies by March 31, 2013.

"Things will move very fast in the coming days as the Standing Committee of Finance will start discussing the Bill after the Budget Session concludes on May 24," Modi said, adding both the Centre and states are for early roll out of the proposed indirect tax regime.

He said the passage of the bill by Parliament is the main hurdle.

Modi, who is also Deputy Chief Minister and Finance Minister of Bihar, further said if the Standing Committee gives its report on GST bill before the next winter session of Parliament, it could be passed in the current fiscal.

VAT collections by states have shown an average increase of 23 per cent in 2011-12 over the previous fiscal. Only Delhi and West Bengal reported less than 20 per cent collection of the levy.

Modi also informed that the newly constituted committee will meet in 15-20 days to sort out the issue of compensating states for their revenue loss on account of reduction in central sales tax (CST). The committee consists officials from both central and state governments.

The Centre has approved setting up of a special purpose vehicle (SPV) for GSTN to provide IT infrastructure for roll out of the Goods and Services Tax (GST).

The GSTN SPV would be incorporated as a Section 25 (not-for-profit), non-government, private limited company in which the government will retain strategic control.

Source - http://www.mydigitalfc.com