The Empowered Committee of State Finance Ministers today indicated that the proposed implementation of the Goods and Services Tax (GST) would be postponed as the states raised questions about the methodology applied by the Thirteenth Finance Commission taskforce. A new date is expected to be announced later.

Committee Chairperson and West Bengal Finance Minister Asim Dasgupta said, "The states have expressed reservations on the methodology and the approach of the taskforce. The rate does not tally with the estimates made by the government, the National Institute of Public Finance and Policy, and the States."

States are doubtful over how the taskforce arrived at the 12 per cent rate. Madhya Pradesh, Rajasthan and Tamil Nadu have already expressed their concern over the proposed implementation. Industry groups and chambers are however calling for GST to be implemented immediately as it will reduce the cascading effect of taxes.

The issue of date and compensation to states for losses faced due to phasing out of Central Sales Tax (CST) are to be discussed tomorrow when the Committee meets the Finance Minister.

The empowered committee itself is divided on the revenue neutral rate and thus has voiced concerns on the methodology of the taskforce and not so much on the rate. The National Institute of Public Finance and Policy (NIPFP) was given the task to determine tax base and RNR for the States.

The exemption list by the taskforce include public services of Union, State and local governments, service transaction between employer and employee, unprocessed food items sold under the public distribution system, educational and health services provided by non-government schools, colleges and agencies.