With Parliament passing the GST Bill in the just-concluded session, Union Finance Minister Arun Jaitley has now asked Andhra Pradesh and Telangana to ensure its early ratification.
Jaitley has written separate but identical letters to Andhra Pradesh Chief Minister N Chandrababu Naidu and his Telangana counterpart K Chandrasekhar Rao in this regard.
"The Constitution (122nd Amendment) Bill, 2014 is required to be ratified by the legislatures of not less than half of the States before it is presented to the President of India for assent.
"When assented to by the President, the Bill will be enacted as the Constitution (101st Amendment) Act, 2016," Jaitley said in letters to Naidu and Rao.
He wanted the two states to ratify it, if necessary, by convening a special session of the legislatures.
"The target date for introduction of GST has been set as April 1, 2017. For introducing the Goods and Services Tax in the country, after amendment of the Constitution, a set of two enabling legislations will need to be enacted by Parliament and one enabling legislation will need to be enacted by all state legislatures for implementation of GST.
"In the interim period, necessary IT infrastructure and administrative arrangements have to be put in place at the Central and the state levels before April 2017," Jaitley said.
These legal, administrative and infrastructural changes could only be put in place after the Constitution has been suitably amended, the Finance Minister said.
"Hence, to ensure GST is implemented in the country at the appointed date, it is imperative that the Constitution (122nd Amendment) Bill, 2014 is ratified by your state legislature(s) at the earliest," Jaitley added.
In the letters, he listed the salient features of the GST and the proposed GST Council.
"It is also proposed the Union Government shall compensate the states for any revenue losses caused to them on account of implementation of GST for a period of five years.
"Introduction of GST will be one of the most important economic reforms in the country. GST seeks to subsume many indirect taxes at the Central and State level. GST will simplify and harmonise the indirect tax regime. Further, GST will broaden the tax base, and result in better tax compliance due to a robust IT infrastructure," Jaitley said.