The Madhya Pradesh government has flayed the exit option to states on goods and service tax(GST), proposed in the recently concluded Bhubaneswar meet.
State Finance Minister Raghavji, said, “Is it a family business that anyone can join it anytime and come out any time. Is it possible in a federal structure? Does our Constitution allow this? Unlike the earlier VAT system, the GST will be a historic change in the taxation system. How come a state joins GST in a particular year and exits in another? There was no consensus in the meeting over this issue.”
“Each member has raised some concerns over the tax design. How can they talk about a later stage, the implementation process, when the tax design process has not been finanlised yet?”
Raghavji, who is firm on his anti-GST stand in its present form, told Business Standard, “Our demand since the beginning has been that there should be no dual tax authorities for the same tax. In its present form, GST is not in the interest of the commoners but serves the multinationals and manufacturers. They should talk to trade organisations, consumer groups or agriculture orgnisations. They are the ultimate beneficiaries or sufferers.”
Raghavji pointed out that “every states’” demanded the Centre “must compensate against central sales tax to all states”, since GST was not going to be implemented till 2013-14.
“Only a new government after elections will be able to roll out if they sort out the states’ concerns. They have announced the formation of three panels that would review concerns and come up with their reports in three months. After that, the empowered committee would discuss those reports. It is a time consuming exercise.”
Madhya Pradesh is challenging the Centre’s move to take away the taxation powers of the states, vested by the Constitution and encroach upon states’ tax domain, again defined in the Constitution.