Gujarat`s minister of state for finance Saurabh Patel on Friday said goods and services tax ( GST), as it is sought to be shaped by the Centre, "will be more helpful to big industries".
He said it will put "excessive load on the common man, as daily items will be more expensive".
"The Gujarat government had raised the point that GST will increase the price of daily items by 7 to 8 per cent. Service sector products, fax machines, catering services, insurance services and many other items will cost much higher."
Suggesting the Centre`s proposed GST scheme will also hit small and medium enterprises, the minister said, "The Centre`s announcement of decreasing the threshold limit for small industries from Rs 1.50 crore to Rs 10 lakh will increase the tax load on them. Many small units will be forced to close down. Unemployment will go up drastically."
Repeating chief minister Narendra Modi`s criticism of the UPA government`s "indecisiveness" regarding the GST, Patel said the Centre was "ignoring" financial interests of states. "At the recent media interaction, even Prime Minister Manmohan Singh sounded helpless, which shows the Centre is directionless in economic reforms."
"We have submitted an alternative model draft to the Centre and the empowered committee," he said, adding. "The model raises four issues establishing IT network throughout the country, giving financial independence to states, compensating the losses that the states would suffer due to the implementation of GST and taking steps to curb the price-rise that may happen because of the new tax regime."
He said the Comptroller and Auditor General of India has "accepted" the nation lacks IT infrastructure required before migrating from value added tax to GST and therefore "it is not appropriate to implement the GST system before establishing a sound IT network."