A majority of the state finance ministers are against immediate implementation of the goods & services tax (GST) since it would deliver a double shock for the economy that is right now groaning under the weight of demonetisation, West Bengal finance minister, Dr Amit Mitra who is also the chairperson of the empowered committee of ministers on GST said on Thursday.
Mitra’s words that covered a threat to strike back at the Centre with which Mamata Banerjee is on a warpath over demonetisation, came right after a press conference by the Bengal chief minister, who lashed out at the Prime Minister on the completion of the note ban decision.
“We are in favour of GST despite knowing fully well that it would have an initial adverse impact on the state finance. But we were agreed to take that initial stress for a good cause. But the Tughlaqi decision of sudden demonetisation of old high value currencies has totally destabilised the country’s economy. In such a situation, majority of the state finance ministers agree the GST rollout now will not only be a double whammy for the state finances but also a double hit for the country’s economy,” said Mitra.
Mitra’s words were ominous as the country has to have GST rolling before September 16, 2017, the day on which the current tax structure will expire.
Union finance minister Arun Jaitley has recently remarked that GST has to come into existence by September 16 next year and there was no way to defer it further.
According to Mitra, although Trinamool Congress has earlier welcomed the GST as a “reasonable” and “progressive”, they did not foresee the effect of demonetisation on the economy and people’s livelihood.
“With this sudden demonetisation, a recession like situation has arisen, where a 2% decline in GDP is predicted. In such a situation, GST rollout is impossible,” Mitra remarked.
Analysts feel that Mitra’s observation as the chairman of the empowered committee of state finance ministers on GST may signal a new chapter of tussle between the states ruled by opposition parties and the Centre. A few issues on GST are yet to be resolved in the Parliament.
Backing her finance minister, chief minister, Mamata Banerjee said Trinamool was the first to support the GST Bill.
“But the manner in which the Prime Minister is bulldozing and forcing the common people to suffer every day because of demonetisation, we cannot allow the GST that will add to public sufferings,” the chief minister said.