MP to push demand for GST postponement

The Madhya Pradesh government will tomorrow press for its demand to postpone proposed goods and service tax from April next year, as it has estimated that losses to all the states will be in tune with Rs 80000 crore before the committee on GST in New Delhi. “The Centre is putting important issues like health and education at stake if implementing GST, as revenues losses to the states would be much higher than calculated,” AP Shrivastava, principal secretary commercial tax department said, “The proposed GST is not different from VAT however the Centre has wrongly calculated tax-base and revenue losses at Rs 21.66 lakh crore (as per Tax Research Unit of Department of Revenue Government of India) and Rs 35,000 crore.” The state finance minister will demand that this is not an opportune time to implement GST and the Centre should give some time for VAT to settle down.

The finance minister has already said in earlier meeting that the Asim Das Gupta headed committee hadnot considered the incidences of tax evasion in a free and cash economy like India while calculating the tax base. “Even if we put at 15 per cent, the potential GST base is not more than Rs 12.77 lakh crore,” the minister had said. The finer points which state finance minister Raghavji will raise tomorrow before the committee are; all taxable goods consumed by household are already part of value added tax base. “The additional tax base in GST may only come from imported consumer goods and consumption of services by households,” Shrivastava said. The finance minister is likely to some stronger points on removal of excise from GST as according to Shrivastava, “It would not help as excise tax generally excludes many goods which are considered taxable, excise tax is levied on goods on the value at the manufacturing point and excludes the value addition in the distribution chain.”