GST must not be rolled out with jugaad: WB FM Amit Mitra

Says regime should be such that common man and small traders benefit alike

The West Bengal government will look at the outcome of the next two meetings of the goods and services tax (GST) Council — on June 18 and 30 — to get an idea of how ready the country is for the roll-out of the new indirect tax system from next month, even as it continues to raise the issue of lack of technological preparedness in this regard. 

State Finance Minister Amit Mitra, in New Delhi for the Council meeting, however, said it was his party (Trinamool) that had pioneered the idea of the GST, but was opposed to its ‘jugaad’ (half-baked) introduction.

“We fought for the GST; our party had it in its manifesto in 2009. But why should we introduce the GST that could be done through ‘jugaad’. This is too big a reform. We will have two more meetings this month that would give us some hint,” Mitra said after the meeting. 

He said small businesses were supposed to put their data on a spread-sheet, which the system did not yet have.

“We must assess the situation and don’t want to fall flat on our face,” he said.

He said it was the Centre that will bear the cost of a hurriedly introduced GST without a proper mechanism. As far as the states are concerned, they will be fully compensated for the revenue loss. “But should states not worry about the nation as a whole,” he asked.

However, Kerala Finance Minister Thomas Isaac said there was no change in the roll-out date of the GST, which is July 1. 

When asked about the GST Network’s preparedness, he said, “Its performance seems to be wanting, but at least we don’t have problems. We are ready.”

Mitra appeared satisfied with the Council’s decision to reduce the GST rate on cinema tickets of up to Rs 100 to 18 per cent against “a proposal of the Centre” to tax it at 28 per cent. He said the state government would compensate the theatres more from its part of the nine per cent state GST to reduce this rate further. The current level of the entertainment tax in West Bengal is two per cent.

He said this would augur well for regional cinema, which had given Satyajit Ray and Adoor Gopalakrishnan to the movie world. 

He also lauded the Council’s decision to approve his proposal to raise the annual turnover limit for availing of the composition scheme to Rs 75 lakh, against Rs 50 lakh proposed earlier. The composition scheme will enable traders to pay 1 per cent tax, manufacturers two per cent tax, and restaurateurs five per cent tax under the GST regime, but they will not get input tax credit. They may also choose to opt for normal GST rates and not the composition scheme. 

Mitra said this would help medium- and small-scale industries, which employ 80 per cent of the workforce and contribute 40 per cent to gross domestic product. 

He said the Council’s decision to exempt human hair, used for making wigs, and lowering the GST rate on job work for leather to five per cent, against 18 proposed earlier would help small workers in his state.
 

Delhi Deputy Chief Minister Manish Sisodia opposed the Council’s decision not to lower tax rates on marbles, granite and spectacles.