The fallout of the government’s ongoing spat with the BJP over former Gujarat home minister Amit Shah’s arrest became evident when the BJP-ruled states rejected the proposed introduction of goods and services tax (GST) at a meeting of the empowered group of state finance ministers. The empowered group, discussing the draft constitutional amendment bill that gives the Centre a veto power on issues of states levying taxes, saw BJP states being supported by Left-ruled Kerala, UPA ally DMK in Tamil Nadu and BSP-ruled UP. The opposition-ruled states also received some support from Congress governments in Andhra and Haryana which also raised the veto issue.
Chairman of the empowered group and West Bengal FM Asim Dasgupta failed to convince members that a proposal could be sent to the Centre demanding that it would not have any veto role as far as state GST is concerned. Bihar FM and deputy CM Sushil Kumar Modi said the UPA government doesn’t have the required numbers in Parliament to get the GST bill through, hinting at the roadblocks ahead for finance minister Pranab Mukherjee—who has laid down a timeframe to rollout the independent India’s biggest tax reforms from April 1, 2011 and wanted to introduce the GST bill in the monsoon session of Parliament. The new GST regime is set to subsume all indirect taxes such as central excise, VAT, service tax and all cesses.
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