Madhya Pradesh govt declares support for GST

State govt wants compensation against central sales tax which previous UPA government had put on hold

The Madhya Pradesh government has cleared its stand on Goods and Service Tax (GST) and has affirmed that it would support the GST regime provided interests of all states are protected. The state wants the new NDA government to resolve the issues which are pending in previous UPA regime.

"State finance minister Jayant Malaiya has today clarified that state is in full support of GST but interests of states should also be protected. The state government wants compensation against central sales tax which previous UPA government had put on hold," a government spokesperson said.

"The state minister today has made it clear that state wants an improvised version of GST which protects interest of all states," the spokesperson said, "The empowered committee of state finance ministers will meet in this regard later this month and issues and concerns will be resolved,"

Since 2009, Madhya Pradesh had opposed format of GST Bill prepared by the previous UPA government as the draft Bill clearly said that states will have no tax autonomy. Previous state finance minister Raghavji had taken tough stand on several occasions and had warned the previous UPA government to face even legal battle if implemented in the "crude" form.

It triggered a debate among other states and a majority of the states had raised concerns over stripping of the power and constitutional rights of levy tax with full autonomy. A series of meetings of empowered committee of state finance ministers often ended in a stalemate over the implementation of the GST.

Madhya Pradesh had not only challenged the withdrawal of tax autonomy of states in the proposed GST Bill but also pointed out that Center wants to encroach upon certain services, which falls under state domain, in the proposed GST Bill. Also it had raised objections that abrogation of Central sales tax will be direct revenue losses to states, Rs 465 crore in case of Madhya Pradesh, and it needs to be compensated adequately if GST regime comes in force.