It is a fact that many states, including BJP ruled states had opposed the GST bill under UPA rule. But were only BJP states opposing GST? Lies. Even as late as December 2013, just 4 months before end of UPA’s 10 year rule, it was reported that the Congress-led ruling UDF government in Kerala has lent support to the Gujarat government’s apprehensions on GST. The Finance Minister of Kerala raised questions on numerous concepts under GST on which there was no consensus nor clarity. He was “openly critical of the Centre’s inability to give any “definite information” about the service tax currently received from each state or any projection about future revenues expected”

  • In May 2013, the then Chairman of the Empowered Committee of State Finance Ministers on GST Sushil Kumar Modi revealed that “Even Congress ruled states like Haryana and Maharashtra are opposed to it (GST) fearing loss of revenue,”
  • In July 2013 it was reported that 3 Non-BJP states had opposed a provision in the GST Bill.Which were these 3 states? Non-BJP ruled Tamil Nadu. Non-BJP ruled Orissa And Congress ruled Maharashtra! So if this GST bill was opposed only on political grounds, why did Congress’s own state Maharashtra opposed it then?
  • In October 2013 also, a report in The Hindu quoted the Jammu and Kashmir Finance Minister (who also served as GST Empowered Committee Chairman) as saying, “Most of the states…majority of the states have opposed bringing petroleum products and liquor in GST framework.They want to keep (the two items) out of GST”.

So it is clear that even in the last one year of UPA, at least 5 Non-BJP states had voiced their opposition to the UPA’s GST bill, and out of these, 3 states were Congress ruled states. So why is Indian MSM crying hoarse that only BJP had opposed GST? Isn’t it clear that BJP and non-BJP states i.e. most states in India were opposed to UPA’s GST bill?

Now, till the last discussion of GST under UPA in November 2013, the states had some major demands:

  1. Keeping Petroleum out of GST ambit
  2. Keeping Alcohol out of GST ambit
  3. Keeping Entry Tax out of GST ambit
  4. Some sort of guarantee from Centre for potential revenue loss

The rationale behind these demands is quite understandable. GST wipes out most state-level indirect taxes, thus taking out one the major source of revenues for states. To have at least some financial independence in their hands, States asked for items like petroleum and alcohol (which have huge sales) to be kept out of GST.

CM Modi, 6 years back gave an interview opposing GST, —Here are the key points of opposition that he presents —

He says without an IT network GST won’t work. At the time of his interview no work was done in this regard. Current form of GST has GSTN the IT network he talked about. Everything is online as you all know. The penetration of Internet was not the same as it was today.

He asked the government to share the minutes of the meeting of empowered committee. This was said to prove that they are giving suggestions to improve the bill but has nothing to do with the bill. Currently minutes are not there. The entire discussions of the GST council is now in 2017 shared with all the stakeholders i.e. the states. The state’s suggestions are now implemented as you might know with the fertilizer tax which was changed an hour ago prior to the GST midnight launch.

He says GST in this present form disregards Federal structure and takes away tax collection rights from the state and this is his opposition. Again in this present form this issue has been adequately resolved by introducing SGST and all rates being fixed by the committee. Overall Modi had two key differences for which he opposed the GST bill which are not there in the present form of GST.

So as how I see it, he had genuine concerns about GST and was not looking to take credit for passing GST.

Author Bio

Qualification: Other
Company: Tax & Legal Professional private limited
Location: Uttar Pradesh, IN
Member Since: 11 Sep 2017 | Total Posts: 1
Myself Shubham Gupta ( Tax Counsultant & Advocate ) i am practising since last 3 year in the field of taxation and company matters and incorporated around 47 company (PVT LTD PUBLIC NIDHI & PRODUCER COMPANY ) across india View Full Profile

More Under Goods and Services Tax

Posted Under

Category : Goods and Services Tax (6832)
Type : Articles (16959)
Tags : goods and services tax (5315) GST (4918)

Leave a Reply

Your email address will not be published. Required fields are marked *