Finance Minister Pranab Mukherjee, had proposed a three-tier structure for the new indirect tax regime – 20 per cent for goods, 16 per cent for services and 12 per cent for essential items. As per formula the Centre and the States will equally share the revenue. The Centre had discussed the draft Constitutional Amendment Bill with the State Finance Ministers. Finance Minister Pranab Mukherjee assured the State that the Centre will fully compensate them on possible losses arising from the implementation of the Goods and Services Tax (GST) regime. "No State would be allowed to suffer any loss and would be fully compensated by the Central Government," he said at a meeting of the National Development Council in New Delhi, attended by most of the State Chief Ministers.

In Constitution of India, Article 246A is to be introduced through Constitutional amendment that would give Parliament and State assemblies power to levy GST. Constitution is to be amended by introducing Article 279A that will provide for creation of a GST council. Headed by Finance Minister, council will have State Finance Ministers as members. Article 279B is to be introduced through Constitutional amendment making a provision for dispute settlement authority. To consist of a chairperson and two members to be appointed by the Chief Justice. GST is to be defined under Article 366 (12A).

The Constitution (Amendment) Bill, 2010, which will see the roll out of the goods and service tax from April next year and the Direct Taxes Code Bill, 2010 are among the 26 Bills which are likely to be introduced in Parliament during the monsoon session.

The government may not introduce too many changes in the Bill on Direct Taxes Code (DTC), except in a few contentious areas such as taxation of Special Economic Zones (SEZs), Capital Gains and Unit-Linked Insurance plans (ULIPs). We expect that the desired tax reforms through the Direct Tax Code and GST will be welcomed by the Trade & Industry and will be the milestones for economic development in the country.

The Federation has already formed Sales Tax/ VAT/GST Representation Committee, Direct Taxes Representation Committee and Excise/Service Tax & Central GST Representation Committee and the Representations on behalf of the Federation have already been filed by Shri P.C. Joshi, Chairman, Sales Tax/ VAT/GST Representation Committee, Shri S.R. Wadhwa, Chairman, Direct Taxes Representation Committee and Shri Mukul Gupta, Chairman, Excise/Service Tax & Central GST Representation Committee.

East Zone organized 2 days Mega Seminar at Siliguri jointly with North Bengal Tax Advocates’ Association and Siliguri Tax Advocates’ Bar Association. The Conference was well organized and was a grand success. I convey my thanks and congratulations to Shri N.P. Jain, Chairman, East Zone and Shri D.K. Agrawal, President,
North Bengal Tax Advocates’ Association and their dedicated team members for organizing such a Mega Seminar.

We are celebrating 63rd Independence Day on 15th August. I convey my best wishes to the members of the Federation and their families on this happy occasion.