GST is a threat to nation’s federal structure: CPI(M)’s Balagopal


‘GST Bill may create a Greece-like situation in India’

While the Congress and the BJP are busy accusing each other of delaying the rollout of the Goods and Services Tax (GST), the Left parties are reaching out to non-Congress Opposition parties and other regional parties to block the passage of the Constitutional Amendment Bill on the issue.

KN Balagopal, CPI(M) deputy leader in Rajya Sabha, who was a member in the Select Committee of the Upper House on the GST Bill and has filed a dissent note, feels that GST will take away the rights of States to decide taxes according to their socio-economic situations. He warns that the Bill, if passed, may create a Greece-like situation in India, too.

Edited excerpts from an interview with BusinessLine:

You had filed a dissent note to the report on the GST Bill. What are your main concerns?

Several provisions in the GST Bill will have to be reconsidered, particularly in the light of the situation in Greece. Like in Greece, finance capital wants India to follow its diktat, without looking at the ground realities. If implemented, GST will take away the rights of States to plan their revenues. Finance Ministries, both in the States and at the Centre, will end up as distributing agencies with no power to take policy decisions. Budgets will be mere papers and the GST council, controlled by the Centre, will be all-powerful.

Even though the Bill will help in expanding the tax net, curbing tax evasion and increasing revenues from tax, the sacrifice of financial autonomy and State-specific financial planning by governments will be negatively affected if it becomes law. And if States’ concerns are not taken seriously, GST will end up benefiting big business houses.

The Congress says they will rally other Opposition parties in opposing the GST. What is your stand?

Our stand is completely different from Congress’s, which is against 1 per cent additional tax for producing States. They are for including alcohol, petroleum and even tobacco in the GST list. If we take the case of tobacco, even during the pre-British period, princely States had different tax rates for tobacco. Tax on such a product should be calculated taking into account the rate of consumption and its effect on people etc.

A unilateral approach will do no good for the country and for the federal structure.

So, how do you plan to oppose the legislation?

If you look at the Select Committee report and the recent debates on the Bill, one can see that the Congress and the BJP are on the same page. Left parties and regional parties, such as AIADMK, have given their dissent to certain provisions of the Bill. We will reach out to more regional parties, citing the possible dangers from this Bill.

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