The Jharkhand Assembly ratified the goods and services tax bill via voice vote on Wednesday.
The GST Bill, passed recently by the Lok Sabha and Rajya Sabha, needs to be ratified by at least 15 states before the President can notify the GST Council, which will decide the tax rate. The deadline for its rollout is April 2017.
The bill, moved by state parliamentary affairs minister Saryu Rai, was met with resounding support, with the only dissenting voice that of CPI (ML) legislator Rajkumar Yadav, who opposed the bill by saying it puts small and big businesses on same pedestal and impinges on the state’s taxation autonomy and federalism.
“There are yawning gaps between corporate and small businesses, rich and poor. This (bill) would burden the poor and further increase the gap and hence should be opposed,” Yadav said.
He also questioned the state’s seriousness and sincerity over discussing and passing the bill and wondered why the same yardstick was not applied for the amendment to the Tenancy Acts, in which the government had bypassed the assembly and took the ordinance route.
He also said that the state in 2014-15 and 2015-16 registered revenue receipts of over `10,000 crore and `14,000 crore respectively, an overall 40% growth and has set target of over `17,000 crore in the current fiscal. “What would be the base year for compensating the state in the wake of revenue loss due to GST?” he asked.
Some members also expressed apprehensions about the Centre’s alleged manipulating its way through three-fourth majority in the council by “influencing” smaller states and the barrier-free movement of overloaded goods-laden trucks resulting in the pilferage of mineral resources and consequent revenue.
“Though the GST council will have a 1:2 representation of the states and the Centre respectively, the clause, which states that decisions by the council will be effective with three-fourths majority could be manipulated by the Centre to have its way. The states would not have much of a say,” JVM-P leader Pradeep Yadav said.
The JVM-P leader also questioned the service tax regimen. “You cannot expect the quality of services rendered in a Mumbai or Delhi hotel, for instance, at hotels in Jharkhand or other poor and backward states despite paying the same rate of tax,” he said.
He also said that the new tax regimen being destination-based would be harmful to the interests of smaller states like Jharkhand, where the purchasing and consumption capacity of people is “abysmally low”.
Leader of the Opposition Hemant Soren suggested a comprehensive survey of revenue losses in expectation of GST implementation to apprise the Centre for compensatory redressal.
Meanwhile, Arup Chatterjee of the Marxist Coordination Committee feared that a barrier-free traffic may result in the unbridled pilferage of minerals from state.
However, chief minister Raghubar Das and Rai allayed the members’ fears and enumerated the expected benefits and ease to people and the business from removal of multiplicity of rates and cascading taxes such as Value Added Tax (VAT). They also said that the GST would cast a net on tax evaders and cut down on corruption as everything will be computerized with an inbuilt mechanism to check tax evasion.
“This is not the end. There are further steps in GST promulgation and members would have the opportunity for a relook in the assembly,” the chief minister said.