Union Finance Minister Pranab Mukherjee on Wednesday made out a strong case for the introduction of the Goods and Services Tax from the next financial year to control fluctuating prices including that of petrol. He reached out to the Opposition in Parliament to support the proposition that would require a constitutional amendment.
Replying to a motion on inflationary pressure on the economy and its adverse impact on the common man moved by the Bharatiya Janata Party, Mr. Mukherjee said the Constitution amendment Bill would have to be moved in the current session if the GST were to be implemented by the next financial year. “It has to be ratified by at least 15 States. I seek cooperation of the entire House,” he said.
He said if the empowered committee of State Finance Ministers, meeting on the GST, agreed on the draft, not only petroleum products but also the entire range of products would be covered under the new tax regime.
According to Mr. Mukherjee, the levies on petroleum products account for 34 per cent of the States' revenues. He said he had to find a way to generate revenue, if not by hiking petroleum prices it would have been some other mechanism because the States have to be given their share of revenue to allow them to perform their constitutional duties. “I know petroleum prices should be rationalised, but that can only be done by implementing the GST that would help in addressing the problem of fluctuating petroleum prices in the domestic markets at least,'' he said.
“If we can do it [introduce the GST] then the entire spectrum of services tax, excise and VAT will be brought under the constitutional mechanism. We shall have to do it collectively. We have been discussing the issue for the past four years and time is running out.”
The States and the Centre are proposed to equally tax the common base of goods and services but the States have opposed the proposal in its present form.