Amid concerns that the Goods and Services Tax (GST) will cause a revenue loss of Rs 8,000 crore to Gujarat, the state legislative assembly on Tuesday unanimously passed The Gujarat Goods and Services Tax Bill, 2017. At a day-long special session of the Gujarat assembly, the Opposition Congress expressed concern about a “non-bailable” clause that is part of the Bill and asked it to be dropped. The party members also claimed that certain items like soaps, toothpastes and mobile phones will attract 28 percent indirect tax through GST.
Tabling the Bill in the House, Deputy Chief Minister Nitin Patel praised Prime Minister Narendra Modi for the deft handling of his political opponents in getting the GST Bill passed in both the Houses of Parliament.
“GST has been in discussion for several years… It is a consumer-oriented law. It will make India an economic superpower,” Patel said in his opening remarks.
Meanwhile, Congress leaders gave credit to former Prime Minister Manmohan Singh and former finance minister P Chidambaram for their efforts in simplifying and harmonising the indirect tax regime of the country through GST. Leader of Opposition Shankersinh Vaghela praised the efforts undertaken during the tenure of Manmohan Singh, and said, “There were a lot of objections when the UPA government brought the Bill… A lot of losses for Gujarat were pointed out. Where have those losses disappeared?”
Vaghela also sought the word “non-bailable” to be dropped from the chapter on “offenses and penalties.” “This Bill is a ditto copy of the one produced by Delhi… But make the laws liberal so that they (businessmen and traders) do not need to find ways to avoid paying GST. Keep it as simple as possible,” he said.
Senior Congress leader Shaktisinh Gohil said, “The seeds of the GST were sown by P Chidambaram during his budget speech on February 2005… After 12 years, the same GST is being discussed here.”
Gohil criticised BJP for having scuttled the GST Bill when it was first introduced in Parliament in 2011. He also remembered how the BJP government in Gujarat had then fiercely objected and said that the GST will cause a Rs 8,000 crore loss. He also quoted several speeches of former state finance minister Saurabh Patel’s made at different forums and said that the BJP in the past was opposed to the GST as it felt that the tax regime was against the federal spirit, it would destroy the physical autonomy and flexibility of states, and will seriously compromise the independence of states.
“Now with the government changing at the Centre, the same Bill has become a game-changer.. The GST is sure to cause Rs 8,000 crore revenue loss to Gujarat. But how will you compensate it,” Gohil asked.
Stressing on the loss to Gujarat due to GST, he also pointed out how revenues from VAT (Value Added Tax) had grown from Rs 13,900 crore in 2009-10 to Rs 30,800 crore in 2012-13. VAT will now be subsumed under GST.
BJP MLA and former minister Saurabh Patel said that the NDA government was able to pass the GST in Parliament as it had won the confidence of all states and had also kept an “open mind”. “UPA was not ready to declare a compensation package for the states,” he said listing it as one of the primary reasons for the erosion of confidence on GST among states during the UPA regime.
In his closing remarks, Deputy CM, Nitin Patel pointed out that Gujarat government will continue to earn Rs 20,000 crore as VAT revenue over petroleum products. “I do not think we will lose even a rupee (by implementing GST),” he said.
Before Gujarat, at least eight state legislative assemblies including Haryana, Madhya Pradesh, Uttarakhand, Telangana, Bihar, Rajasthan and Chhattisgarh have already passed their respective State Goods and Services Tax (SGST) Bills.
The Gujarat Assembly also passed the Gujarat Value Added Tax (Amendment) Bill 2017 and the Gujarat Local Authorities Laws (Amendment) Bill, 2017.