Mamata Banerjee declines Jaitley's GST invitation, calls rollout a blunder

Bengal CM equates tax rollout to demonetisation, says pan-India economy totally unprepared for it

Terming the scheduled rollout of the GST on July 1 as "another epic blunder of the Centre", the first one being demonetisation, West Bengal's chief minister, Mamata Banerjee, as a sign of protest of an early implementation, has decided not to accept union finance minister, Arun Jaitley's invitation of the celebration party on GST scheduled on June 30 at the Parliament House.

"Our parliamentary party has decided not to attend the 30th June, 2017 midnight programme at the Parliament House to celebrate GST, as a mark of protest", she said adding that the pan-India economy is not ready for the rollout on the scheduled day.

"Small business entities are not yet ready with the basic requirements like invoice, accounting system, IT system, etc. Another piece of evidence of unpreparedness comes from the fact that the Return Form had to be simplified for the first 6 months as all systems are not in place", she said.

Moreover, the e-Waybill System is not yet designed and states are being asked to run their own systems as a stopgap arrangement.

For an effective rollout, she said that atleast six more months is needed to notify all rules and procedures and give enough time to the stakeholders, particularly the Small and Medium Enterprises to successfully implement the GST.

"Otherwise a chaotic situation may arise in our vast economy for which the Government of India will be primarily responsible", Banerjee said.

The Centre has been keen to implement the radical tax reform on July 1 which the West Bengal government has been opposing on grounds that it will hurt the micro-small business units pan-India.

Although opposing the tax reform, the West Bengal government adopted itself to the new tax regime by bringing in an ordinance on June 15.

Banerjee led Trinamool Congress (TMC) had been one of the first parties in the country to support the GST once the idea was mooted while the BJP had opposed it for over seven years when it was in the opposition at the Centre.

However, after the tables turned in its favour at the 2014 general elections, the BJP pushed for the radical tax reform. The TMC, although in the opposition at the Lok Sabha, had then supported the BJP for the GST rollout.

The state's finance minister, Amit Mitra, who chaired the Empowered Committee of the State Finance Minister, which gave GST its formative shape, had also criticised the Centre of rolling it at a time the nation was unprepared. He said small traders will particularly be hit and it was necessary not to rush it.

Small traders and the textile industry are opposing the GST and have called for a nationwide shutdown of micro-small businesses to protest the July 1 rollout.

Mahesh Singhania, patron of the Bhartiya Udyog Vyapar Mandal (BUVM), said that while the GST proposes harsh punishment such as a direct jail term for the traders failing to comply, it lacks clarity in its implementation and procedure.

"We support the GST but oppose the hurried rollout. There has to be clarity on several fronts like categorising the goods and deciding on input credit. The systems necessary for the implementation are not in place and a majority of the traders are not familiar with the online process", he said.

BUVM has called for a one-day nationwide shutdown on Friday, while the textile industry has called for a three-day shutdown.

"We would not be surprised that they (GST Suvidha Providers) are neither fully equipped technically nor are they confident about handling the transition. If our opinion is sought, extending the time for the implementation would be the preferred choice", P Venkatesh, director of platforms and solutions at Maveric Systems said.

Banerjee and her party, alongwith a large section of the 3,00,000 odd traders in West Bengal are of the opinion that the GST will damage the federal structure of Indian polity.

West Bengal and Kerala were the only states to bring in ordinances for the changeover to GST while the state of Jammu and Kashmir (J&K) is yet to pass either an ordinance or a Bill in its state Assembly. Economists opine that although J&K would be able to conduct intra-state business and collect revenue as well, no other state would be keen to do business J&K unless it adapts itself to the new tax structure.