This refers to Sukumar Mukhopadhyay's column "Time to move forward with a new GST model" (Expert Eye, August 25). The author's anguish arising out of endless negotiations between the Centre and states for the past eight years, and a spate of fresh demands from the states is quite valid. But the suggested model will have problems on two major issues. First, the burden of Cenvat on goods and services after the goods come out of the factory will not be credited when state Goods and Services Tax or GST (value added tax plus other state taxes) is levied and collected by the states. The second issue will be administering state GST for interstate movement of goods, where the share of state GST will accrue to the destination state.
The fresh demands of the states are mere posturing to negotiate a higher amount of compensation. Once the issue of compensation is settled, everything will fall in place.
Sumit Dutt Majumder New Delhi
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