GST roll-out won't be from next April; no timeframe yet

New Delhi: The finance ministry today admitted that the proposed Goods and Services Tax (GST) regime will not be implemented from 1 April 2011 and said that no timeframe for the introduction of the new indirect tax system has been set yet, reports PTI.

Revenue secretary Sunil Mitra said it would be difficult to roll out GST without constitutional amendments, contrary to the suggestion made by some states.

"No question of it (GST) happening (from) 1 April 2011. Certainly not. It is not possible," Mr Mitra told reporters on the sidelines of a seminar by consultant Skoch.

For GST to be implemented, certain amendments to the constitution are needed, he said.

These amendments require time, Mr Mitra said, adding that the Finance Ministry has not decided on new timeframe for introducing GST.

Originally scheduled to be implemented from the beginning of this fiscal, the GST regime will subsume excise duty, service tax at the Centre's end and VAT on states front, besides some local levies surcharges and cesses.

However, differences between states and the Centre over the structure of the new tax regime led to delays in its implementation. Now, even the revised deadline will be missed.

Constitution amendments are required because, under the current mechanism, the Centre cannot impose tax beyond manufacturing, and states cannot levy service tax.

"Without the constitution provision in place, it would be difficult to bring GST. So obviously that (the constitutional amendment) has to come first. We have not got that yet. I cannot predict what will happen," Mr Mitra said.

Last month, some state finance ministers suggested an alternative model for GST to the one that was proposed by the Centre.

In fact, Gujarat finance minister Saurabh Patel had said it is not useful to discuss constitution amendment unless the issues of autonomy and fiscal flexibility of states are fully addressed.

The Centre had suggested a GST council, comprising Union finance minister as the chairman and state finance ministers as members, for effecting any changes in the new tax system. Besides, it suggested a dispute settlement authority.

Apprehending dilution of their autonomy, some states had proposed an alternative model, suggesting that the current Empowered Committee of state finance ministers be enlarged, to be chaired by the Union finance minister, instead of a council.

At a meeting in Goa last month, they also suggested doing away with the proposal on dispute settlement authority.

Indirect tax expert with Deloitte, Prashant Deshpande said that dropping of GST Council and common dispute resolution settlement body should mean eliminating the two important pillars of a unified and harmonious GST system.

Mr Mitra said, meanwhile, "The (Goa) meeting has been held.

I have, of course, reports from my colleagues who have been there, but the minutes of the discussion are yet to come to us."


Mahindra to set up manufacturing facility in Tamil Nadu

Mahindra & Mahindra Ltd has said that it plans to set up a facility in Tamil Nadu for manufacturing its three-wheelers and passenger vehicles. No financial details were provided.

Currently, Japanese automaker Nissan Motor India, Renault, BMW, Ford and Hyundai Motor India have their manufacturing facilities near Chennai.

On Wednesday, Mahindra & Mahindra ended 3.1% up at Rs805 on the Bombay Stock Exchange, while the benchmark Sensex closed 0.3% down at 20,875 points.


Tata Motors says it’s not recalling the Nano, but will provide extra fittings free of cost

Rebutting some media reports about the recall of its small car Nano, Tata Motors Ltd on Wednesday said that the design and build of its car was "robust".

However, the company can provide additional protection to the exhaust system of the vehicle and the electrical system at no extra cost, said Tata Motors.

The company is the country's largest vehicle maker and it said that there are "no generic defects" in the Tata Nano. It said that during an investigation by a team of internal and international experts, it found instances of "additional foreign electrical equipment installed" or "foreign material left on the exhaust system".

Tata Motors said that from the third week of November, each of its Tata Nano customers will be informed about the "additional" protection.

On Wednesday, Tata Motors ended 2.5% up at Rs1,302 on the Bombay Stock Exchange, while the benchmark Sensex closed 0.3% down at 20,875 points.


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