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Prime Minister Narendra Modi, who aims to push the tax reform to
replace various federal and state levies with one tax, is facing
resistance from states after his surprise decision last month to
scrap high-value currency notes.
Many states including West Bengal and Kerala have said Modi's
decision to scrap 86 percent of the cash in circulation had hit
their revenue collections, as they collect value-added tax on
goods and other duties.
The finance ministry and state finance officials have broadly
agreed on a national sales tax and are making "reasonable
headway" on a few contentious issues, Finance Minister Arun
Jaitley said on Friday.
They will meet again for two days from Jan. 3, Jaitley told
reporters, but did not clarify whether a self-imposed deadline
of April 1 for the launch of the tax could be met.
"I am trying my best," he said when asked about the April
introduction of the tax.
"I am not going to bind myself to anything. Our effort is to do
it as quickly as possible and I think we are making a reasonable
headway," Jaitley said.
He assured the states that they would be compensated 100 percent
for losses directly attributable to the GST implementation for
five years.
The long-awaited GST is one of the most significant reforms
since India opened its economy 25 years ago, and the most
significant revamping of the tax system since independence in
1947.
"There is no way we can meet the April 1 GST deadline," K
Pandiarajan, a minister of the state of Tamil Nadu, told a TV
channel after the meeting.
Officials said the new tax law would need to come into effect by
mid-September when the old system of indirect taxation is due to
lapse.
(Additional reporting by Nigam Prusty; Editing by Malini Menon)
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