Former Union Minister P Chidambaram on Sunday said there are "serious differences" between the Union Government and state Finance Ministers on finalisation of the GST tax structure and that he did not think they were anywhere near an agreement on what the standard rate should be.
"As far as I can see there are serious differences between the economics division and revenue department and also there are serious differences between the Union Government and state Finance Ministers. I don’t think they are anywhere near any agreement about what the standard rate should be," he said.
He was speaking at a panel discussion on former RBI Governor D Subbarao’s book "Who Moved My Interest Rate", orgainsed by the Indian Institute of Management – Bangalore.
Chidambaram said there is a lot of work to be done to finalise the GST tax structure. "If you don’t reach agreement on the standard rate, they cannot fix the band rates. So there is a lot of work to be done," he added.
He said the success and failure of the transformation of legislation would depend upon how the central government fixes the standard rate of GST.
Speaking to reporters before the panel discussion, Subbarao said it is difficult and premature to speculate on what would happen on this front, but expressed confidence that the tax bureaucracy, both at the Centre and state, have the capacity to implement GST.
"It is difficult and premature to speculate on what will happen, but one thing I want to say is that I have complete confidence that our tax bureaucracy, both the states and the Centre, has the capacity to implement GST," he said.
"I have worked with state and central government departments and I know for sure that our tax bureaucracy is among the best to implement GST," he added.
Subbarao said there are a number of steps to be concluded before GST becomes operational in reality.
"Some of them have to do with determining of GST. Some of them have to do with potential political differences. And some of them have to do with capacity to implement," Subbarao said.