After touring eight countries in the last six years to learn the “nuances” of the tax regime, a 56-member delegation has embarked on a foreign study trip yet again.
Led by the chairman of the Empowered Committee (EC) of state finance ministers and Bihar Finance Minister Sushil Modi, the delegation of finance ministers and officials from 19 states and union territories as well as union finance ministry officials, are currently on a 14-day tour to Vancouver, Toronto, Ottawa and Tokyo to study the issue of ‘Complexities of Invoice Mechanism System’ under the GST.
The delegation, whose strength is not too short of the 81-member Indian contingent at the London Olympics, was cleared at a time when a cash-strapped government tries to observe fiscal prudence and pare down frivolous expenditure through steps such as limiting the number of officials on foreign tours.
Officials contend such tours give a chance to understand international best practices that can be adopted while designing the GST framework for India. “Further, ministers and officials have both changed during the course of deliberations on the tax framework. The study tours help give them perspective as well as working knowledge,” a senior official said.
But some like EC chairman Modi, Delhi’s Revenue Minister A K Walia, Assam Chief Minister Tarun Gogoi, Manipur Chief Minister O Ibobi Singh and Madhya Pradesh Finance Minister Raghavji, who has opposed the tax, have been on such tours in the past.
Also, this is the EC’s second visit to Canada after a similar trip in 2006. Since then, it has also gone on similar study tours to European Union nations and visited France, Spain, Belgium and Luxembourg, besides Australia, Singapore, Brazil and Britain.
The cost of the latest trip, from September 12 to 26, is not known as it will be split between the Centre and participating states, but it includes business class air travel for the ministers, five-star hotel stay as well as time for some sight seeing.
But despite the numerous studies and consultations, the Empowered Committee has failed to reach a consensus on the structure or the implementation date of GST, touted to be the country’s biggest indirect tax reform. It is also expected to help prop up GDP growth by about 2 per cent.
The introduction of the tax has been deferred since 2010 and although previous finance minister Pranab Mukherjee had announced a new deadline of April 1, 2013 for its roll out, finance ministry officials admit that it could be pushed back to 2014. A constitutional amendment bill for introduction of the tax is still pending with Parliament as the Standing Committee has not yet finalised its report. Meanwhile, state governments have been haggling with the Centre for compensation for the phased out central sales tax even as there is no finality on tax rates under the GST regime.