New Delhi: The Centre and states on Thursday made "some headway" in resolving issues that have been holding up a consensus on bringing the long-delayed GST bill to replace all indirect taxes.
The headway was achieved after a meeting of the Empowered Committee of State Finance Ministers' Chairman A R Rather with Union Finance Minister Arun Jaitley late on Thursday evening.
After three rounds of discussions on Thursday — one of the empowered commitee members and two with Mr Jaitley — the centre offered an olive branch to the states who have been holding up the bill because they did not want petroleum products and entry tax to be a part of the GST regime.
The centre said the states will be compensated for all possible revenue losses in whatever form they want, sources said.
States have said they will respond to Centre's proposal shortly, sources added.
"We have made some headway. We will meet the Union Finance Minister again in a week's time," Rather told reporters after a series of meetings.
Minister of State for Finance Jayant Sinha also said that a "very good progress" has been made. The fine print of "progress" could not be ascertained.
The centre wants to introduce the GST regime, hanging in balance for last 6-7 years, by April 1, 2016.
The states want the Centre to provide for a Compensation Fund mentioned in the Goods and Services Tax (GST) Bill.
Sources said Mr Jaitley has told the states that GST is hanging fire for over 6 years now and the trust deficit should end since the Centre has promised to compensate the states fully for any revenue loss.
Earlier in the day at a meeting of the empowered committee, the states had rejected the draft GST Bill saying it does not address their concerns, particularly on compensation structure, entry tax and taxation of petroleum products.
Government sources said the language of the Constitution Amendment Bill was derived from the first minutes of the Bhubaneswar meeting of Empowered Committee.
"There are two-three more concerns which we will address," the source said.
"For all states which are consumers, GST will be beneficial. For Maharashtra and Gujarat it is challenging. We have found out a way," the source said.
To compensate the states for revenue loss, Mr Jaitley on Wednesday had announced releasing Rs. 11,000 crore as part compensation which will make up for the states' revenue loss till 2010-11 on account of phasing out the Central Sales Tax regime currently in place.
The GST roll-out has missed several deadlines because of lack of consensus among states over certain crucial issues on the proposed new indirect tax regime.
