Petroleum, alcohol derail GST talks
BS REPORTER
New Delhi, 21 October
Negotiations between the Centre and states to move to the Goods &
Services Tax (GST) regime have hit a roadblock again, with the latter
opposing the former's proposal to include petroleum products and
alcohol under the ambit of the proposed reform. States have also
turned down the Centre's proposal to subsume entry tax in GST.
The finance ministry had been hoping to table the Bill in the winter
session of Parliament but with no resolution on the issue in sight
before the general elections, the talks have almost hit deadlock.
States, which met in the national capital on Monday to consider the
revised draft Constitution Amendment Bill prepared by the Centre, did
not agree on the provisions regarding petroleum, alcohol and entry
tax, as that might dent their revenue collections. A final decision is
expected to be taken at the next meeting of the empowered committee (
EC) of state finance ministers in Meghalaya next month.
"Most states have opposed bringing petroleum products and liquor under
the GST framework. Some are also opposed to subsuming entry tax in
GST," EC Chairman A R Rather told reporters.
Though states have been insisting it be left to local bodies to
collect entry tax, they had earlier given their in- principle approval
to keeping petroleum outside the Constitution Amendment Bill, a
measure recommended by Parliament's standing committee on finance. The
finance ministry had agreed to keep it outside the Bill but within
GST.
A U- turn now might put the Centre in a fix. The standing committee
had also suggested including entry tax in GST.
Some states also suggested the Centre should not push GST before the
general elections in 2014 and let the new government take a call on
it.
"The term of the present Lok Sabha is expiring in May 2014. Therefore,
in the interest of the federal democracy, the present Lok Sabha should
leave such an important issue for decision by the next Lok Sabha,"
Madhya Pradesh Finance Minister Jayant Malaiya said in his speech.
About a dozen states gave their representation on the draft Bill in
the meeting on Monday, while the rest will present their views on
November 15- 16 at the meeting in Meghalaya. These states are also
likely to express reservations on the draft Bill, bringing back talks
on GST to square one.
Now, either the Centre will have to agree with states' demands which
will mean turning down the Parliament panel's recommendations, or
convince the states. Earlier, Finance Minister P Chidambaram had made
it clear that if states came on board on GST, they would get ₹ 9,000
crore as compensation this year for revenue loss on account of a cut
in Central Sales Tax rates.
Turn to Page 24 >
Negotiations near deadlock, as states oppose Constitution Amendment Bill
BACK TO START
LINE? | Aug 7: Parliament's standing committee files its report on
Constitution Amendment Bill |Sep 18: Centre sends draft of the Bill to
the empowered committee ( EC) of state finance ministers; aims to
table it in Parliament's winter session |Sep 19: EC meets and sets up
a subcommittee to look into the draft Bill |Oct 21: EC says most
states opposed to inclusion of petroleum, liquor in GST |Nov 15:
States to meet again in Meghalaya to finalise their views on the Bill
________________________________
Click here to read more...Turn to Page 24 >
Click: Article continued from…Petroleum, alcohol
________________________________
Petroleum...
A finance ministry official said the Centre was still hopeful of a
resolution at the Mehgalaya meeting.
GST has already missed several deadlines due to differences between
states and the Centre over various issues. The Centre intends to table
the Constitution Amendment Bill in Parliament's winter session so that
a message is sent out to industry that the Centre is clearing a major
hurdle in the way of GST, which seeks to subsume most major state and
central indirect taxes and can give a push to the economy.
E- KYC to be accepted for verification: Irda
Insurance Regulatory and Development Authority ( Irda) said on Monday
that the eKYC ( electronic know- your- customer) services
operationalised by the Unique Identification Authority of India (
UIDAI) will be accepted as valid KYC process for insurance.
Earlier, Irda had informed insurers that a letter issued by the UIDAI
containing details such as name, address and Aadhaar number was a
valid document for customer identification.
UIDAI had operationalised e- KYC services recently. " The
acceptability of these services for KYC purposes under the Prevention
of Moneylaundering ( Maintenance of Records) Rules, 2005, was
discussed with the Department of Revenue, Ministry of Finance and
operational issues were taken up with the insurers," Irda said in a
circular. It pointed out that the finance ministry has said e- KYC
services may be accepted as a valid process for KYC verification under
the Prevention of MoneyLaundering ( Maintenance of Records) Rules,
2005. In the light of this, " it has been decided that e- KYC services
of UIDAI is acceptable for KYC verification subject to specific and
express consent of the customer to access his/ her data through UIDAI
system", Irda noted.
The regulator added in cases where e- KYC services are availed for KYC
verification, certification requirements under earlier guidelines of
anti- money laundering shall be deemed to
be complied with. BS REPORTER
Karnataka to announce new policy for IT industry
BS REPORTER
Bangalore, 21 October
The Karnataka government is set to announce a new information
technology ( IT) policy to attract more investment into the state,
with a special focus on raising investor interest in tier- II and
tierIII cities.
The new policy, to be unveiled at the flagship ITE. Biz event on
Tuesday, also seeks to increase employment. The government expects the
new IT policy would enable the sector to employ about two million
people in the state directly by 2020, against the current 900,000.
The policy also aimed to raise the state's annual IT exports from ₹
1.65 lakh crore to ₹ 4 lakh crore by 2020, said Srivatsa Krishna,
secretary in the department of IT, BT and S& T, Karnataka. The policy
would enable the state to become the " largest IT cluster on the
globe" and the " world leader, overtaking Silicon Valley", he added.
While Bangalore has remained the heart of IT activity in India, other
cities in Karnataka have also emerged as potential IT destinations.
These include Mysore, where Infosys has set up a270- acre campus.
Mangalore and Hubli are also emerging as IT hotspots.
"We are bringing a radical change in our IT policy, making it more
investor- friendly," said S RPatil, minister for IT, biotechnology,
science and technology, planning and statistics, Karnataka. " The ITE.
Biz event will be more meaningful this time because we are set to
announce several incentives and exemptions to the IT sector,
especially for start- ups.
These incentives include helping tier- II and III towns attract
investments," he added.
The minister said the announcement of the policy would be a " historic
announcement".
The policy, he said, would offer some stamp duty exemptions and power
rate concessions.
It is also likely to offer incentives with employment- linkages.
Patil said the state government would reduce power rates for IT
companies from ₹ 7.25 a unit to ₹ 5.75 a unit in tier- II and tier-
III cities, subject to the fulfillment of some employmentrelated
conditions. It is likely to boost investments in allied sectors such
as electronics hardware manufacturing.
Expects Bangalore to become world's biggest IT cluster by 2020; new
policy to boost investment in tier- II, tier- III cities
The new IT policy seeks to employ about two million people and raise
the state's IT exports from ₹ 1.65 lakh crore to ₹ 4 lakh crore by
2020
--
CS A Rengarajan
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