Gujarat minister sternly criticizes centre’s indecisiveness on GST

Gujarat’s Minister of State for Finance Shri Saurabh Patel has sternly criticized UPA government’s indecisiveness regarding GST and its policy of ignoring financial interests of the states. Reacting to the interaction of Prime Minister Dr.Manmohan Singh’s talk with electronic media, he said that the very acceptance of the helplessness from the head of the central government proves that the central government is directionless in the matter of economic reforms and can not think anything but to blame the states.

Dr.Singh’s attempt to blame Gujarat government and a minister clearly suggests that how helpless he is and how ridiculous condition he is situated in, Shri Patel said.

Minister of State demanded that the minutes of the meetings that central government empowered held to discuss the GST issue, should be put before the people of the nation in order to reveal the real mentality of the central government.

He said the arrest of a minister that Prime Minister talked about happened on July 25, 2010, but Gujarat government had already acquainted centre with its well-thought approach towards GST a way back.

Shri Patel pointed out that in a meet held on Jun 16, 2010, with Union Finance Minister Shri Pranab Mukherjee, Gujarat Chief Minister clearly insisted upon a nation- wide IT network for a successful implementation of GST. Shri Mukherjee immediately accepted the suggestion and gave necessary direction to his secretary. Before this, Gujarat government had already initiated and submitted an alternative model draft before central government and empowered committee, in the presence of secretaries of central government, on January 8, 2010, Shri Patel added.

In a meeting of empowered committee made up of representatives from the central government and the Finance Ministers of the states, held on July 21, 2010, Gujarat government had came out with four points which needed to be ensured while implementing GST. The points included suggestions on establishing IT network throughout the country, giving financial independence to the states and meeting with loss that states will incur due to the implementation of the GST and doing necessary to curb the price-rise that may happen because of GST. Prime Minister has concealed the facts and tried to lead people astray, which is unfortunate, he said.

Shri Patel said the central government came up with first constitutional draft of GST on July 21, 2010. The draft gave the finance ministry even more powers than the Vidhansabha and Parliament, but congress ruling states didn’t oppose. Second, revised draft, was also supported by the congress ruling states. It is when Gujarat made its point before empowered committee, states like Tamilnadu and Uttarpradesh also started also opposing the draft along with Gujarat. Non-Congress states also took the stand of Gujarat government. Shri Patel demanded to publicize the white papers of the letters that Tamilnadu Chief Minister wrote to the central government, and said that it will make clear that all the states are opposing the centre’s policy.

Central government has announced the GST rates without discussing with the states. Centre only kept on talking about unanimous decision but never discussed with the states, putting all the constitutional bindings aside. It has not even listen to the suggestions of the committee’s chairman Dr.Asimdas Gupta, Minister of State said.

Shri Patel said the taxation structure shaped by the central government will prove helpful only to the big industries and will put excessive load on the common people as the daily items will become more expensive. Gujarat government is opposing the GST draft for the good of common people. Gujarat government had already raised the point that GST will increase the price of daily need items by 7 to 8 percent. Service sector products, fax machines, catering services, insurance services and many other items will become more expensive, he added.

Moreover, Centre’s announcement of decreasing the threshold limit for small industries from Rs.1.50-cr to Rs.10-lakh will increase the tax load on the industrial units. Unemployment will increase with the closing such industrial units, Shri Patel said.

Minister of State said that CAG has also accepted that the nation lacks the IT infrastructure that requires before migrating from VAT to GST and it is not appropriate to implement GST before establishing a sound IT network.

Shri Patel has moreover, demanded to publicize the proceedings and minutes of the meetings held by the central government to handle the GST matter instead of blaming states.