GST- Ultimately vote in Rajya Sabha can only decide... what other options we have? - FM
GOVERNMENT seems to be determined to bring in GST, if possible with Congress support, if necessary without it - provided the numbers add up in the Rajya Sabha.
"I will, till the last day, continue to persuade the Congress to see reason so that they don't go back on the bill they themselves introduced. ...However, if the Congress persists with its opposition, ultimately a vote in the Rajya Sabha can only decide… what other options we have?", said the Finance Minister in an interview to a TV Channel.
The Communist Finance Minister of Kerala who now supports GST writes:
The GST would have been a reality had it not been for the disruption of compensation payment by UPA Union Finance Minister P.Chidambaram and thoroughly opportunistic disruption of the consultations by the BJP states in 2010-11. It was the Madhya Pradesh Finance Minister Raghavji, who led BJP's disruptive charge but it was also clear the BJP State Governments including Narendra Modi's Gujrat did not want the GST to be passed during the UPA regime. Interestingly, their main objection was abridgment of States' rights. It was a complete turn around from their election manifesto which had promised passage of GST, if voted to power.
CPI(M) has always expressed its serious reservations against the efforts to integrate the indirect taxes in India into VAT or GST. The indirect tax reforms are a part of the globalization process with the aim of designing a tax regime which would integrate not only the regional markets but also remove all burden of the indirect taxes on internationally traded goods. Specifically, in the context of India, the introduction of VAT and GST will seriously undermine the limited taxation rights that the States are enjoying. The fiscal autonomy of the States already constrained by the FRBM Acts would be further constrained when sales taxes, luxury tax, entertainment tax, various entry taxes etc are subsumed into single national VAT/GST. ...Therefore, no one need to have any illusion that after the VAT regime was ushered in the States still have the taxation rights enshrined in the Constitution. Therefore, there is very little further to lose with the introduction of GST. Even the formal constitutional amendment can only make de facto reality into de jure reality. On the other hand, there can be a gain with the introduction of GST. The States gain right to tax Services, a right that was wantonly surrendered to the centre in the seventies. And remember, Service Tax is currently the most buoyant of the taxes. Having accepted VAT, sooner we move to GST better for the States...
But there are many issues that have to thrashed out before we can move to a consensus...
If BJP is serious about passing the constitutional amendment in the Monsoon session, without which there is no hope whatsoever of introducing the GST in next fiscal, the Union Government should call an all party meeting for frank discussion of the issues remaining. It is not sufficient to have meeting of the state finance ministers or bilateral talks between BJP and Congress. An all party meeting before the monsoon session is the need of the hour. I hope Union Finance Minister Arun Jaitley will take this much needed initiative .
Dr. Subramanian Swamy says, "I don't think GST is going to be a game-changer. If it comes, it is ok. If it doesn't come also it is ok."