NEW DELHI: Backing the view of West Bengal finance minister Amit Mitra, senior Congress leader and former minister Veerappa Moily on Thursday said “the time was not right” for pushing through the enabling legislations needed to roll out Goods and Services Tax by April 1, this Winter session.
Citing the “devastating” effect the “so-called demonetisation” move has wrecked on the economy, Moily said he “fully supported” Mitra’s view on the matter. “We are not against GST, but the government does not appear to be keen to push through GST — otherwise why would it spring this (demonetisation) on the people”.
Asked what the Opposition can do, if the government pushed the two pending GST legislation as money bill, Moily retorted, “This is a democracy and we sit in Parliament — do you think a taxation reform of the scale of GST can be rammed through and implemented without consensus?”
Political rhetoric apart, the fact that a majority of the State assemblies have approved the constitutional amendment bill passed by Parliament, paving the way for GST, the Opposition can really do little.
In a series of TV interviews, the West Bengal FM, on Wednesday, raised concern that State revenues will be deeply impacted by demonetisation and therefore cannot be expected to go for GST now.
Pointing out that the government’s decision to demonetise high-value banknotes has already impacted State finances, Mitra said India’s federal structure may not be prepared for a ‘double whammy’ as implementation of GST could further hurt State finances.
“We must do GST but do it at a time when it is feasible, successful, when states’ revenues do not decline significantly, Centre is able to compensate the states and federal polity of India is preserved. I do not see that at this time,” Mitra, who is also chairman of the Empowered Committee of State Finance Ministers, said in an interview.
“We expected a huge destabilisation of the fiscal architecture of the country with GST. State taxes will fall significantly, and that is why we sought that the Centre compensate us for five years,” Mitra said.
“We all supported GST under the premise that this would be the only destabilisation factor. We did not know that there will be a much bigger destabilisation in the form of demonetisation that will be let loose on the country.”
Mitra also pointed out that states are reporting a huge fall in revenues as demonetisation hits tax collections from sectors like hotels, transportation and small manufacturers. He said he will take up the issue with other State finance ministers.