Empowered Committee of State Finance Ministers on GST, under its new chief Sushil Modi, will meet on August 19 to discuss various issues related with the roll out of the ambitious indirect tax regime.

"The next meeting is on 19th (August). They (panel members) will discuss various issues among themselves, thereafter I am going to have an interaction with them," Finance Minister Pranab Mukherjee said after meeting Modi.

The two-leaders discussed the road ahead for the Empowered Committee as the Centre is keen on early roll out of the Goods and Services Tax (GST).

"We discussed the future course of action and how the Empowered Committee will go ahead," Mukherjee said. 

It will be the first meeting of the panel under the chairmanship of Modi. He was elected chairman after the position fell vacant following defeat of the earlier panel chief and the then West Bengal Finance Minister Asim Dasgupta in the assembly polls.

Modi said the Empowered Committee would discuss issues like IT infrastructure required for GST, CST compensation and the Constitutional Amendment Bill. 

While a Constitutional amendment bill for roll out of GST has been introduced in Parliament and referred to a Standing Committee, there are several issues which are yet to be resolved between the Centre and States.

These issues include provision for States to levy cess in case of natural calamities, their autonomy in taxing matters and concerns on powers of the proposed dispute settlement authority.

The two leaders also discussed the concerns of the State governments on loss of revenue on account of reduction in CST rates.

"...certain issues on the CST compensation (was also raised) on which I also shared my views and we will arrive at a decision shortly," the Union Finance Minister said. 

CST, a tax on inter-state movement of goods, was reduced from 4% to 3% in 2007-08 and further to 2% in 2008-09 after the introduction of VAT. 

The Centre has asked all the states to file their compensation claims for the last fiscal on account of reduction in CST.

The Centre plans to do away with CST in phases as it plans to implement Goods and Service Tax (GST), a new indirect tax regime.

An amount of Rs 2,411 crore has been released to 10 States for loss of CST revenue in financial year 2010-11. 

The Empowered Committee has suggested that the Centre formulate a method for calculating compensation for 2010-11 fiscal on the basis of the exercise followed for three fiscal years ending March 2010. Meanwhile, Chairman of the Unique Identity Authority of India and Empowered Group on IT infrastructure for GST, Nandan Nilekani held a meeting with Modi.

The two discussed an initiative for centralised IT infrastructure for GST across the states which can at present be used for VAT and will be available for GST as and when it is implemented.

Nilekani also proposed to form a company with shareholding contribution from states for development and operation of IT infrastructure for GST. (PTI)