Gujarat not to accept Goods and Services Tax in current form
March, 29th 2011
The state government on Friday said that it was not ready to accept the proposed Goods and Services Tax (GST) in the current form, stating that it took away states' autonomy and could cause revenue loss to states.
Minister of state for finance, Saurabh Patel, said in the assembly that GST, if implemented in the current form, would take away all taxation related powers from the states.
"The autonomy of states will be taken away with implementation of GST in current form. This means that tax rates will be decided by the Centre and states will have no role in it. There will also be heavy revenue loss to states like Gujarat," Patel said during the discussion on budgetary allocations for finance department.
Quoting a recent report of National Institute of Public Finance & Policy, Patel said that implementation of GST would have caused revenue loss of more than Rs3,000 crore in 2009-10.
"According to our estimates, the revenue loss would have been to the tune of Rs5,000 crore in the current year," he said further.
Patel said that the Centre also accepted that some states would suffer revenue loss.
"Not just BJP-ruled states, even other states such as Tamil Nadu and Uttar Pradesh are not ready to accept GST in the current form, and have sought various amendments," he said further.
The minister said that big companies would benefit from implementation of the new tax regime, while the common man would suffer.
He also questioned the need for implementing GST if revenues of states were not going to go up, prices of essential commodities would rise and autonomy of states was going to be taken away.
He also pointed out that GST implementation would fail in absence of Information Technology infrastructure.