Five parties, including the Left, on Thursday asked the Centre to assure the states that their financial needs will be taken care of before the GST Bill, which take away states’ right to raise resources, is brought.
This was conveyed at a meeting Finance Minister Arun Jaitley had with Rajya Sabha leaders of CPI(M), CPI, Trinamool Congress, Samajwadi Party and BJD.
Maintaining that the GST Bill would deprive the states of their “right to raise resources” through sales tax, surcharge or cess, CPI(M) leader Sitaram Yechury said the Constitution amendment bill would lead the states “to come with a begging bowl to the Centre, placing them at the Centre’s mercy.”
“The state governments will be deprived of their only right to raise revenue as this right will be abolished with the Bill” as they would not be able to impose any cess even during an emergency or natural disaster, he said, adding that this was conveyed to the Finance Minister at the meeting.
“The GST Bill is only meant for imposing a tax. It does not deal with Centre-State relations. So, a resolution has to be found outside the Bill and the government has to come out with an assurance,” the CPI(M) leader said, adding that “we will have to see how the government addresses this issue.”
Regarding the meeting, Yechury said “we were merely informed about the discussion the government had with the Congress. There was no scope for a discussion.”
He also said there is “nothing in writing so far” on what the latest bill actually says.
Accusing the Narendra Modi government of going by the strength of the parties in Parliament to hold discussions on the GST bill, he said “so we are immaterial in terms of number of seats we have. It is a game between the BJP and the Congress”.
Asked whether Jaitley indicated by when the bill will be brought to Rajya Sabha, the CPI(M) leader said “there is no indication. It will all depend on what is happening between the BJP and the Congress.”
Yechury said at the recent meeting Jaitley had with the state Finance Ministers on the issue, the latter had adopted a resolution “which has not yet been made public. We don’t know anything about it and have asked the Minister to provide us with a copy as we want to know what the states have said.”
Referring to a cess imposed by West Bengal government to bail out the victims of Saradha scam, he said “though we are opposed to such a cess as the culprits (of the scam), instead of the people, should be taxed for it, the state government will have no right to impose such cess.”
In this context, he referred to the “fat tax” imposed on fast-food in Kerala and a Shiv Sena statement that the octroi revenue of Maharashtra was more than the Bengal budget and asked “how will Maharashtra or Kerala be compensated if GST is implemented and the states’ rights are taken away.”
On the issues Jaitley briefed about at the meeting, Yechury said it focussed on the capping of GST at 18 per cent and whether there will be some flexibility for states to take care of their revenues.
The CPI(M) leader also reiterated his party’s demand that the government should hold an all-party meeting to evolve a consensus on the GST issue, saying it has been a parliamentary practice as such meetings were called earlier on crucial legislations like those on women’s quota, food safety, right to information and tribals’ right to forest land.
“This practice has been completely abandoned by the Modi government,” he said.