Congress-ruled State governments on Monday expressed hope that a situation involving voting would not arise in the GST Council and urged the Centre to consider the issues raised by Opposition parties on the implementation of the GST and the functioning of the GST Network. The Congress currently has five members in the GST Council.
Talking to reporters here on Monday, finance ministers of Congress-rules States Manpreet Singh Badal (Punjab), Krishna Byre Gowda (Karnataka) and Kamala Kannan (Puducherry) said the Gujarat elections seem to have heralded good sense as the Centre has begun considering the suggestions of States. “We are ready to work with the Centre to ensure clarity. We still believe that a single-rate GST, as envisaged by the Congress, would have helped the country,” Badal said.
‘Growth jeopardised’Gowda said the perception was that the GST would accelerate GDP at least by two per cent. “GST has disappointed on all the above parameters, and, in some areas, turned the clock by a few decades. It is surely a case of poor implementation on all fronts: concept, design, tax rates, exemptions, compliance requirement and technological preparedness,” he said.
The ministers added that as a result there is mammoth confusion all around, “with harassed taxpayers running for cover, government going for quick fixes in the wake of forthcoming elections, and the business community nearly unanimous that government has frittered away a huge opportunity with non-seriousness and ill preparedness matched only by excessive sloganeering.”
The Ministers said projected gains to GDP stand seriously jeopardised with the denial of tax credits and the policy of keeping key sectors such as energy and real estate outside the GST’s ambit. “Energy costs can comprise up to 30 per cent of the cost of production in many key sectors. Even while Parliament gave its mandate to include everything in GST except alcohol, the government failed to show the required clarity or courage to implement a world-class GST. This has multiplied cascading and is likely to be inflationary for the economy, as the cascading will be passed on to downstream sectors,” they said.
The Ministers said they will press for further concessions to textiles, tourism and MSME sectors. “A taxpayer is required to file 37 returns in a month in each of the States and Union Territories (UTs) in which he has business. Thus a person present in all States and UTs will file 37 x 36, or 1,332, returns a year. There were a mere two returns in Service Tax earlier for a taxpayer operating all over the country. It is impossible to imagine filing a return without the assistance of a tax professional,” they added.