MP govt raises objection to current GST Bill

The Madhya Pradesh government's stance is dictated by the fact that it is representing the state. The state finance minister, Raghavj, who was present at the meeting of the House Panel, Standing Committee on Finance, which is looking into the GST amendment bill, today made a presentation before that Standing Committee, which includes members from the Congress and other parties.

Madhya Pradesh is pointing out that the assumptions that are underlying the GST model at this point of time are over-optimistic as far as revenue gains are concerned.

"The state will suffer substantial loss at the present rates which would be permanent. It is not sure how long the Centre will continue to compensate the states," says Raghavji.

There is already Central Sales Tax (CST) compensation dispute.

The Madhya Pradesh government says that the current GST model as proposed by the Centre will lead to a fiscal imbalance between states and that the control of several fees of taxation, which are currently with the states will actually pass to the Centre. The state government has suggested an alternative model.

The larger picture is that, Pranab Mukherjee has roped in BJP's Sushil Modi as the chairperson of the Empowered Committee of State Finance Ministers.

Now, with the absence of Pranab Mukherjee and two different views of senior BJP leaders on the same issue it is yet to be seen what recommendations are given by the standing committee led by Yashwant Sinha.

"At this point of time it will be an uphill task for the government to convince the standing committee to approve the current GST amendment bill in the form that it has been presented before it," says Sinha in his earlier comment.

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