GST - Save Fiscal Autonomy of States - Former Prime Minister Deve Gowda
IN a letter to the Prime Minister, former Prime Minister HD Deve Gowda says;
++ Any attempt to restrict empowerment or cross empowerment to the States in administering tax on services on any reason will amount to the Centre going back on its earlier assurances and endanger the principles of federalism, as well as fiscal autonomy of the States.
++ The spirit of GST and the principles of federalism should go hand in hand without any violation or favouritism.
++ The States had agreed to GST, relinquishing their exclusive constitutional right to tax goods. In reciprocation, the power to tax services on a mutually agreed and respectable ratio was assured to the States by the Central Empowered Committee of State Finance Ministers, which paved the way for passing of the GST Bill in the States.
++ He is against GST Councils attempt to reserve a large portion of empowerment to the Central Excise Department at the cost of Commercial Tax Departments of States.
++ He has been watching developments relating to strikes and protests by officers and employees of commercial tax departments of various states against the GST Council's attempt to reserve a large portion of empowerment to the Central Excise department at the cost of the commercial tax departments of the States.
++ Entrusting a larger responsibility in administration of GST to States is the only way to protect expanding avenues of revenue, badly needed for State welfare and infrastructural programmes.
The Kerala Finance Minister Dr. Thomas Issac says,
++ If the Central government adopts a more flexible stand, it should be possible to thrash out the differences and move towards the target date for the implementation of the GST. States are gripped with the fear of losing their financial autonomy after deletion of entry 54 and 62 from the constitution.
++ That fear has to be assuaged by reinforcing the commitment on the part of the Centre by agreeing to the States' request of a vertical split up of service tax administration so that goods and services up to Rs 1.5 crore would be in the domain of states and anything above would be administered simultaneously by the Centre and the States.
Creative Destruction: Former Finance Minister P. Chidambaram says, "I am glad the Prime Minister has called for suggestions on the World Bank Group's report. The best suggestions will be based on 'creative destruction' of the present system".