The annual meet of industry body Ficci saw at least one of the state finance ministers expressing concern over the ‘implementation’ of GST (Goods and Services Tax). West Bengal finance minister Amit Mitra said that unpreparedness and hasty implementation (of GST) have resulted not only in revenue loss but also hit small and medium enterprises (SMEs) hard.
Mitra who has previously served as the secretary general of Ficci also raised the issue of the inconsistent revenues generated by GST. “The hasty manner, in which GST was rolled out, had taken a huge toll on the revenue collections,” he said. The revenue collections in October were Rs 83,346 crore, significantly down from the September figure of Rs 95,131 crore.
He further pointed out that the reduction in the GST collection could have implication on the compensation to states adding that the states need Rs 1.72 lakh crore for the first four months for revenue protection. About Rs 1.33 lakh crore has been compensated to states in the first four months, and there is a shortfall of Rs 39,111 crore, Mitra said.
Mitra however, was rebutted by Jammu and Kashmir finance minister Haseeb Drabu who said these were still early days and it would be unfair to judge the GST system just yet. “Give it another three to four months. If the government and the GST Council are as responsive as they have been, what we have in the making is a robust GST which works for business, the central government and the states,” he said.
In another session, Bihar finance minister Sushil Modi said that the GST Council will consider bringing electricity, petroleum products and some other items under the ambit of GST in future. “Electricity, real estate, stamp duty and petroleum products should become part of GST (Goods and Services Tax). This would be our (GST Council) endeavour,” he said.
Chalking out a possible mechanism to bring fuel products under the GST ambit, Modi said petroleum products will attract the highest tax slab prevalent at that time (currently 28 per cent) and states would be at liberty to levy cess on it in order to protect their revenues. Both states and the Centre earn 40 per cent of their revenue from petroleum products at present.