GST MAY MISS APRIL 2012 TARGET TO BE IMPLEMENTED AS STATES OPPOSE DRAFT LEGISLATORY

[Nagesh Bajaj]

The introduction of GST through the comman goods and service tax or GST from the next financial year appears uncertain with fresh opposition pouring in from BJP ruled states who claims that it would reduce their status of that of municipalities and corporations. Finance minister Pranab Mukherjee’s plan to roll out a national level goods and services tax (GST) by April 1, 2012, may get further delayed as finance ministers of two key states have said that it may not be possible. Citing a lack of consensus amongst political parties as well as loss of states’ autonomy, Madhya Pradesh finance minister Raghavji and Bihar’s deputy chief minister Sushil Modi on Tuesday said that the deadline would not be met.

The opposition ministers think that the kind of draft that the central government have presented could not be passed.the finance minister of Madhya Pradesh said that which state will agree to become a ministry or a corporation?he said “To hand over all the powers to the centre and then beg before it for money is against the spirit of sarkarai commission report.”

The BJP minister claimed that “Why will states agree to give up their fiscal autonomy when in effect they will turn into municipal corporations and keep begging for compensation from the Centre? The idea of GST is against the principles laid down in the Constitution as well. We have time and again expressed our reservations on the tax.

The GST bill needs approval of two third of the Parliament and half of the Indias 28 states to become the law.Hence BJP support is crucial at the states as well as at the central level.The opposition leaders think that the Constitution amendment bill introduced by centre is reactionary.It is absolutely useless and against the interest of the states.It has provisions which will curtail the autonomy of states. The centre is interfering in the rights of the states.

Meanwhile, breaking away from the stand taken by BJP-ruled states, Modi called the tax a “historic reform”. “If GST is implemented, Bihar will be a part of it. There is no question of having our own choice or dislike. This is a historic reform and we believe that the entire country should be part of this reform. It is also a part of the BJP’s manifesto,” he said, adding that though in the short run there may be some revenue losses, GST will help states in the long-term. Taxes play a very crucial role in the emancipation of business firms. They also helps in ascertaining the budgetry aspects of the financial firm.