Skip to main content

When Gujarat under Modi, later under Anandiben Patel, called GST an "attack" on state financial autonomy

By Our Representative
Even as the ruling NDA government has been charging the opposition, especially Congress, for seeking to roadblock implementation of the Goods and Services Tax (GST) across India, facts suggest, Narendra Modi as Gujarat chief minister, and later his successor, Anandiben Patel, taken strong exception GST till December 2014.
The Gujarat government made a written submission as late as December 11, 2014, seven months after Modi became Prime Minister, before the empowered committee of finance ministers. It opposed the 122nd Constitutional Amendment Bill introduced by Finance Ministe Arun Jaitley on three grounds:
  • that GST Bill is an attack on fiscal autonomy of the state; 
  • that GST Bill will adverse impact state revenues, and the 122nd Constitutional Bill on GST brought by the Modi government does not address any of states’ concerns; and 
  • that the implementation of GST would cause severe loss to a manufacturing state like and affect the ‘Make-in-India programme’. 
The written submission said, “The states have time and again expressed their concerns … mainly about the fiscal autonomy and the adverse implications on the revenues of the state due to introduction of the GST regime.”
It stated, the new draft of the 122nd Constitutional Amendment Bill from the empowered committee failed to address “many of the concerns raised by the states have not been reflected in the draft”, adding, the states would “lose their fiscal autonomy”, in the same way as it happened after the introduction of the value added tax (VAT) in the place of sales tax.
Recalling that the Prime Minister had launched “the Make in India campaign”, the state government pointed towards how would Gujarat particularly lose: “In the GST regime, the abolition of central sales tax (CST) and the implementation of the destination principle would result in severe losses to manufacturing states that are also net exporting states.”
This was a continuation of what Narendra Modi as Gujarat chief minister had been saying between 2007 and 2014 to numerous empowered committee meetings of state finance ministers. In each of them, the state government opposed the constitutional amendment comprising GST Bill, describing it as against “the federal spirit of Constitution” as also the “rights of states to fiscal autonomy”.
On August 4, 2010, the state government said that the “constitutional amendment has come at a time when consensus is lacking even within the empowered committee”, as it “fundamentally alters powers of the states to levy and collect indirect taxes.”
It added, “The power to determine rate of taxes is a basic function of legislative body like Parliament or, as the case may be, State Legislature. Article 265 very clearly states that no tax shall be levied or collected except by authority of law. Thus, provisions of proposed Article 279A runs counter to the existing provisions of Constitution.”
Disagreeing with “wide-ranging powers given to GST council”, the Modi government asserted, “These powers shall remain within legislative and administrative purview of State and cannot be ceded to the council as it will take away entire financial autonomy of the State.”
On September 20, 2010, it said, the “Gujarat government does not support the proposed constitutional amendment in its present form”, as it would “destablise balance source of revenue and duties between Centre and States and would adversely affect the financial health of states and deprive them of a very important means of governance.”
On October 29, 2010, it said, “The constitutional amendment in the present format put forth by the Government of India is not acceptable to Gujarat.” On February 11, 2011, the it said that “the new constitutional amendment draft proposed by the Government of India is retrograde in nature and completely against the tenets of fiscal federalism.”

Comments

TRENDING

Noam Chomsky, top scholars ask NRIs to take stand on human rights violations in India

Counterview Desk
Renowned world scholars, including Noam Chomsky, James Petras, Angela Davis, Fredric Jameson, Bruno Latour, Ilan Pappe, Judith Butler, among others, have issued a statement castigating the Narendra Modi government for allegedly creating an environment of fear through arrests, intimidation and violence.

Actionable programme for 2019 polls amidst lynch mobs, caste violence, hate mongering

Counterview Desk
Reclaiming the Republic, a civil rights network, has released a document prepared under the chairmanship of Justice AP Shah (retired) -- and backed, among others, by Supreme Court advocate Prashant Bhushan, bureaucrat-turned-human rights activist Harsh Mander, economist Prabhat Patnaik, Right to transparency activist Anjali Bhardwaj and social scientist Yogendra Yadav  (click HERE for full list) -- with the "aim" of putting forth policy and legislative reforms needed to “protect” and “strengthen” the Constitutional safeguards for India’s democratic polity.

Call to support IIM-Bangalore professor, censured for seeking action against Uniliver

Counterview Desk
Sections of the Indian Institute of Managements (IIMs) across India have strongly reacted to the decision to censure Dr Deepak Malghan, a faulty at IIM-Bangalore. Prabhir Vishnu Poruthiyil, who is faculty at IIM-Tiruchirapalli, has sought wider solidarity with Dr Malghan, saying, "The administration has censured Deepak for merely suggesting a meaningful action against Hindustan Unilever for their abysmal environmental record" by “disinviting” it for campus placement.

India under Modi "promoted" crony business, protected financial fraudsters, fueled bigotry

By Sandeep* and Rahul Pandey**
Narendra Modi's ascension to power was accompanied with jubilation and expectation. His supporters were expecting an end to era of corruption and initiation of good governance which was described as Achche Din. His party's adherence to idea of nationalism was believed to make India a vibrant country and guide India to be a world leader. He gave the slogan of 'Sabka Saath, Sabka Vikas' conveying that his government was for all.
Corruption The government system is infested with corruption. A minimum of 10% is siphoned off from government schemes and projects, some of which goes back to political party in power and remaining is pocketed by various administrative, executive and political functionaries. This corruption continues and has increased. Now an additional Rashtriya Swayamsewak Sangh (RSS) person working as Official on Special Duty or some equivalent position in every government department also has a share in this booty.
The Narendra M…

Inviting Rajapaksa to India "insult" to 1,40,000 Tamils killed by Sri Lankan army

Counterview Desk
In the context of Sri Lankan opposition leader Mahinda Rajapaksa being invited in India, about 75 human rights activists*, claiming to be concerned about rights violations during the civil war in Sri Lanka, especially in 2009, have joined together to express their dissent through a statement.

Post-advisory, Govt of India appears reluctant to ban e-cigarettes, "harmful" to kids

By Rajiv Shah
Is the Government of India dilly-dallying over the issue of banning e-cigarettes, which have been declared by anti-tobacco activists across the world as providing “an entryway to nicotine addiction”, especially among the kids? It would seem so, if the latest developments are any guide.

A Godse legacy? BJP rulers have "refrained" from calling Gandhi Father of the Nation

By Dr Hari Desai*
What an agony! On one hand, the entire India is celebrating the 150th birth anniversary of Mahatma Gandhi under the leadership of Prime Minister Narendra Modi, but on the other side, so-called Hindu Mahasabha members have been found mock-enacting the killing of the Mahatma and celebrating the murder by distributing sweets!

No aadhaar, no ration? Hard blow by Gujarat govt on poor and marginalized

By Pankti Jog*
Only those who have aadhaar registration and linked it with ration card will get ration from a Public Distribution System (PDS) shop. This decision of the Gujarat government has hit very badly thousands of poor and marginalized communities of Gujarat, especially during the drought year.

World Bank needs a new perspective on development, not just a new president

By Maju Varghese*
The resignation of the World Bank President Jim Yong Kim was an unexpected development given the fact that he had three more years to complete his tenure. Resignations at such a high level after bidding for a second term is unusual which prompts people to think what would have led to the act itself.

Not just Indian women engineers, men too face sexual harassment at workplace: US study

By Rajiv Shah
A recent research, carried out jointly by two US-based non-profit organizations, Society of Women Engineers (SWE) and Center for WorkLife Law (WLL), based at the University of California, Hastings College of the Law, has found that 45% of women engineers as against 28% of men engineers complained that it was perceived as “inappropriate when women argued at work, even when it was work-related.”