GST Bill in limbo as BJP ruled states raise autonomy fears

The Impasse on the proposed goods and services tax (GST) could not be resolved at Monday’s meeting of state finance ministers as BJP- ruled states continued their opposition to the draft of the Constitutional Amendment Bill.

A consensus could not be reached as the BJP- ruled states raised the fear that the new Bill would encroach upon the fiscal autonomy of states.

DMK- ruled Tamil Nadu and Uttar Pradesh, where the BSP, is in power opposed the draft.

The proposed GST is meant to replace the existing the Central excise duty, service tax, value- added tax (VAT) and sales tax levied by the state governments. It was slated to be introduced on April 1, 2011 but with no consensus in sight it appears to be headed to miss this deadline as well.

“ I think there is some political agenda, which has to be dealt with by the BJP high command,” Haryana finance minister Ajay Singh Yadav said.

Yadav said it was difficult for the states to introduce GST from April 1, 2011, even as the original schedule of April 1 this year has already been missed. Madhya Pradesh and Gujarat suggested alternative GST models with many states questioning the need for this when only six months were left for its scheduled roll out.

Madhya Pradesh finance minister Raghavji said, “ States’ autonomy would be affected by the constitutional amendment.

We have opposed it. We have suggested alternative model by which amendment to constitution is not required.’’ “ The proposed amendment to the constitution is not acceptable to us,” Gujarat finance minister Saurabh Patel said in a speech circulated to the mediapersons, as he did not attend the meeting.

Replying to the query whether the new deadline would be met this time, the empowered committee chairman Asim Dasgupta said, “ This I will tell you after meeting the Union finance minister.” The empowered committee representatives will now meet finance minister Pranab Mukherjee to inform him about the deliberations. “ They will again meet with representatives of the Union finance ministry in a month’s time,” Dasgupta said.