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3:11 pm - Friday November 23, 5032

GST Deferred

The application and implementation of GST has been deferred from 1st of April 1st of July by three months. Although it is put forward that deadlock in the GST Committee has ended but it appears as if the basic role of the Central Government has been diluted by agreement and inserting dual control in the GST.

It is against the basic objective of the GST to have one rate of taxes for the entire country and to create a national market and business for economic and financial integration of the nation. Till now different tax rates among the states encourage shifting of trade activities to the state of lower tax rates and vice versa on getting benefits. Sometime back Madhya Pradesh Government gave bonus over the minimum support price on foodgrains as fixed by the Central Government.

The net result was that wheat from neighbouring states poured into Madhya Pradesh creating problem of over flow the state and shortage of procurement in other states. In Gwalior Mela Government gave tax rebate of sale and the Chief Minister Mr.Digvijay Singh admitted that car were sold in Kolkata and it sale was shown at the Gwalior mela to gain tax rebate benefits. In petrol diesel the entry tax in Uttar Pradesh is lower than Madhya Pradesh and truck transport go for filling in that state.

By GST such thing will not be thereon the other hand VAT, Service Taxes and Excise due will be abolished and there will be on one tax. But inflated demands of the State has unnecessarily diluted the Central Power. Now on the income of companies earning more than one and half crores annually the 90 per cent tax assessment and control will be with the States and 10 per cent with the Centre.

The duel control over taxes is a very negation of the concept of the GST. From national point of view national market and one tax rate for the whole country the role of the Central Government should be like that of the Supreme Court, whose ruling and decisions are binding all over the country on that contexts. In GST the Centre after giving the hearing to the States should take a final and binding decision not only in GST but in all other inter-state matters be it even river water disputes.

The States are not parallel to the Central Government. The States are not sovereign it lies with the Central Government on the name of nation. There should not be any sort or form of duel control in the GST. The division of tax administration had been holding up the finalization of GST tax law making it difficult for the Government to stick with April 1 deadline.

The Centre has also given leeway to states on integrated GST which deals with inter-State sales. The GST is aimed to turn the country into common market by removing state tariffs that act as a barrier to free movements of goods and services. The States wanted exclusive jurisdiction for States upto limit of Rs.1.5 crores and it were able to secure 90 per cent and 10 per cent with the Centre.

Posted in: Editorial

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