MP takes lead in opposing GST Bill

Posted by R. Prabhakar, General Secretary, AICEIA, Visakhapatnam Branch

Unlike Anna Hazare, almost all states are ante up against another Bill silently, which is pending for clearance in Parliament for the last two years. Madhya Pradesh is taking lead to this move. State finance minister Raghavji is upbeat on his claim of mustering support from even Congress-ruled states against Union governments move. According to him, the Union government has kept the legal doors ajar, as in a largely cash economy like India, it is nearly impossible to strip the states off their power to levy tax. In no case will we support the present form of GST, wherever you take us in the world. Now Congress-ruled states have realised the fact that the present form of GST draft is against the constitution. There is a simmering protest against it. Almost all states, except for Maharashtra, are ready to move Supreme Court, he said. Raghavji and key ministers of other states along with empowered committee members on GST are going to visit Europe on September 7, to study GST. Earlier last month Tamil Nadu Commercial Tax and registration minister SS Krishnamurthy, and Commercial tax minister of Uttar Pradesh Nakul Dubey, also raised the issue that GST Bill 2011 is a violation of basic structure of constitution. In his speech last month Krishnamurthy had made it clear in his speech, Apropos the contents of the constitution (one hundred and fifteenth amendment) Bill,2011, we have some concerns with regard to the way the GST Council and the GST Dispute Settlement Authority are being contemplated. Though the proposed Article 279A contemplates the setting up of the GST Council as an advisory authority which will take decisions through consensus, the GST Dispute Settlement Authority proposed under Article 279B will have an overriding authority on the states, as its decisions are binding on the states. This means the states virtually lose their authority to fix rates, which is unconstitutional and not acceptable in a federal set up. The Council and the authority also impinge on the Parliaments authority. Nakul Dubey clearly mentioned in his speech that Union government wants to launch GST forcefully in all states, that is why it has introduced GST Council and Dispute Settlement Authority. The union government has introduced GST (constitution amendment bill) despite empowered committee has not given its consent yet (on these authorities), Dubey said in his speech. Madhya Pradesh cabinet has already decided to move against the present form of the bill and lobby support from all the states. If Raghavji is believed, the Union government has failed to muster support in its favour from all states in all previous meetings. All states not only want to retain their taxation power but also a cut in threshold limits proposed in the Bill. They also have urged the centre not to create any authority or council between state and centre. States are also opposing the GST since Union government is making an opaque gesture towards them on demand of central sales tax compensation. The next meeting of the empowered committee is likely to take place in last week of September.

Source: Business Standard 16-09-2011