Was GST planned the 2G way?, asks Madhya Pradesh

Stalemate during the Monday meeting in New Delhi over controversial implementation of goods and service tax (GST) has triggered a fresh debate over the central government policy. “Was it planned like the 2G spectrum? Who are those who wrongly calculated that GST will increase the tax revenue of the Indian government?” These are few question which officials in the state are raising. It is most likely, since most of the states, barring Bihar, Kerala, Jammu and Kashmir and those north eastern seven sisters, are now going the Madhya Pradesh way.

“They (the empowered committee) did not have any clue over the reformed GST or integrated GST, all other states now have realised the present form of GST or integrated tax will neither be in favour of the Centre nor the states. The Centre wants to abolish CST (Central sales tax) and has proposed a new system whereby a central agency will collect taxes and later states will claim their share. Is it possible for states to track intra-state transactions? The CST should stay there as it is the best available option to track intra-state transaction and avoid incidences of tax evasion. This way GST will die a slow death,” said a highly placed government source adding, “Who are those who have calculated the figures. Does the committee have answers?”

Reportedly the state minister Raghavji skipped participation in the meeting as there was nothing new to present and the empowered committee led by Asim Dasgupta has had no breakthrough over the issues raised by Madhya Pradesh. “Except for those states which have no manufacturing base are following Madhya Pradesh line.

The state government, which has strongly opposed GST (goods and service tax) in its present form by terming it an anti-democratic bill will counter it another time in the next meeting of the group of ministers in New Delhi on December 20. However this time it will take on the Centre in a positive manner with a suggestion of an alternative mechanism. States are demanding immediate release of at least 60 per cent of the Central Sales Tax compensation announced by the centre. Madhya Pradesh is likely to be more aggressive if the Centre remains adamant on its stand. It may raise issues of “The involvement of the corporate sector” in framing the policy over GST.