Economy

GST launch: Opposition sees divergent stand

Pedestrians walk below a banner calling for a protest against the steep hike in the GST regime for sanitary and hardware products, in Bengaluru on June 29, 2017.

Pedestrians walk below a banner calling for a protest against the steep hike in the GST regime for sanitary and hardware products, in Bengaluru on June 29, 2017.   | Photo Credit: AFP

It will be officially launched by President Pranab Mukherjee on June 30, 2017 midnight at the Central Hall of Parliament.

The Union government is all set to roll out the Goods and Services Tax (GST) that will subsume 16 different taxes, including excise, service tax and VAT from July 1, 2017. Dubbed the biggest taxation reform since Independence, it will be officially launched by President Pranab Mukherjee on June 30, 2017 midnight at the Central Hall of Parliament.

Vice President Hamid Ansari, Prime Minister Narendra Modi, Lok Sabha Speaker Sumitra Mahajan and former Prime Minister H.D. Deve Gowda are among the top dignitaries attending the event. Two short films on GST will be screened on the occasion.

The Congress, the Trinamool Congress, the Rashtriya Janata Dal, the DMK and the Left parties are boycotting the launch, while the Samajwadi Party is yet to decide. The JD(U), which broke ranks with the Opposition on the President’s election, has decided to register its presence by sending the Bihar Energy Minister to the event. Bihar Chief Minister Nitish Kumar will not attend and JD(U) MPs are free to attend or keep away.

The Nationalist Congress Party (NCP) broke ranks with the Opposition and is attending the function as “it had supported the legislation during its passage”. NCP supremo Sharad Pawar will be present at the launch.

Union Finance Minister Arun Jaitley has urged the Congress and Left parties not to “disassociate” from the decision they were a party to.

 

Let's have a brief look at some of the issues surrounding the GST:

Who were the initial opponents of GST?

Initially, the BJP-ruled Rajasthan, Haryana, Maharashtra, Assam, Madhya Pradesh, Jharkhand and Chhattisgarh, and manufacturing States such as Tamil Nadu and Karnataka were against the GST over revenue implications. Their fear was that they need to be dependant on the Central sharing formula for their own welfare schemes. After the Centre’s promise that the most-affected States would be compensated, almost all States fell in line.

How many States have ratified the law?

As of date, all States and Union Territories, barring Jammu and Kashmir, have endorsed their respective State Goods and Services Tax (SGST) Act. While West Bengal and Kerala took the ordinance route, other State Assemblies ratified the law.

Why does Jammu and Kashmir stand out?

Unlike other States, no Central law can be implemented in Jammu and Kashmir unless the State Assembly ratifies it. Due to the special provision — added when the State joined the Union of India — Central GST law currently excludes the State. Opinion is divided in the State due to the fear that the GST might impinge on the State’s special status. With the BJP part of the coalition government, the Centre hopes the State will fall in line eventually.

Why did Kerala and West Bengal take the ordinance route to pass GST law?

Kerala promulgated an ordinance on June 21, 2017 to ratify the SGST Act after Mr. Jaitley warned that the States failing to pass the GST-enabling law in time would lose out on compensation from the Centre.

In the case of West Bengal, the Mamata Banerjee government opted for ordinance on June 15, 2017 as the Centre turned down its request to defer GST rollout by a month. Expressing her strong reservations, Ms. Banerjee has decided to skip the launch ceremony. This “unnecessary disastrous hurry is another epic blunder of the Centre,” she said.

Unnecessary exercise: Left

The Left parties have termed the meeting an unnecessary exercise.

CPI(M) general secretary Sitaram Yechury has questioned the government on “hurrying” into introducing GST and recalled that the ruling BJP had opposed the system when it was in the Opposition.

The CPI said, “[the government is] doing it in a hurry without giving proper time.”

Wholesale cloth merchants protest against GST at a market in U.P.’s Moradabad on June 30, 2017.

Traders protest against GST at a market in U.P.’s Moradabad on June 30, 2017.   | Photo Credit: PTI

 

The Samajwadi Party is unsure about attending the function. “Whether we attend the midnight GST launch or not will be known later in the day,” said senior SP leader Naresh Agarwal. Mr. Agarwal on June 29, 2017 termed the GST a “black law” that was “similar to reestablishment of the East India Company in the country”. His colleague, senior leader Rajendra Chaudhary, however, said the SP was always in favour of the tax reform.

Justifying the NCP's divergent position from that of most Opposition parties, senior party leader Tariq Anwar said his party had supported legislation during its passage and there was no reason for it to skip the function.

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Printable version | Feb 29, 2020 7:35:11 AM | https://www.thehindu.com/business/Economy/goods-and-services-tax-launch-whos-in-whos-not/article19179676.ece

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