GOVT MUST BUILD ENVIRONMENT OF TRUST ON GST, SAYS BENGAL FM AMIT MITRA
TAX BLUES Says groundlevel work still remains
NEWDELHI: It is the duty of the government to manage the atmosphere of Parliament and create an ecosystem of trust to help pass the Goods and Services Tax, West Bengal finance minister and head of empowered committee of state finance ministers on GST Amit Mitra told HT.
“At present, there is dissent among Opposition parties regarding several issues. But the Centre will have to create an ecosystem of trust and only then can GST be passed. GST is not outside the political discourse in Parliament,” Mitra said.
The Centre and states on Tuesday agreed on the broad principles to fix the tax rate, setting the stage for the passage of the Constitution Amendment Bill on GST in the Rajya Sabha as early as next week. Finance minister Arun Jaitley met state FMs as the government stepped up efforts to iron out differences on the tax that has remained stuck in Parliament for want of consensus.
“Minor concerns remain. For example, the GST network, which is the IT back-up to this tax rollout, is work in progress, states are yet to see the full extent of this network. So when it is presented, there might be some minor issues with it,” Mitra added.
But even if the Bill is passed in the current session of Parliament, many state finance ministers have expressed their doubts about implementing GST from April 1, 2017. “This question (on implementing GST from April 1, 2017) can be decided by Parliament and the will of the government. But a lot of ground-level work is still left,” Mitra said.
The most contentious issue regarding GST’s rollout has been the revenue neutral rate — the rate that allows the central and state governments to collect the same revenue despite changes in laws. While Congress has agreed to let go of it demand of capping the rate at 18% in the Amendment Bill, several states are still concerned about it.
“States also do not want the GST rate to be capped or mentioned in the Amendment Bill, but we have formulated a principal for deciding the rate, and the Centre has promised to include that in the Bill,” Mitra said. “During years of high inflation, the tax rate should not add to the burden of the common man. Secondly, whatever the rate, the revenue generating capacity of states should be protected.”
The other concern is the dual control of states and the Centre over taxing businesses. “States were demanding that the Centre will not have the power to tax businesses with a turnover below ₹1.5 crore. And to support the Bill, states needed assurance on the issue of dual control. The finance minister has assured that this demand will be met, and it will be part of the Bill,” Mitra added.