New Delhi, Aug. 4: States on Wednesday rejected a draft bill on Goods and Services Tax (GST) over a clause giving the Central government power to veto their decisions, even as the finance minister, Mr Pranab Mukherjee, sought their cooperation for passage of the tax reform.
States feared that giving veto power to the Union finance minister on state GST would dilute their fiscal autonomy.
“This proposed draft Constitutional amendment bill related to GST in its present form is not acceptable to the states... States in general have reservations about the Union finance minister having any veto power on state GST,” empowered committee of state finance ministers, Mr Asim Dasgupta, told reporters here.
The rejection came within hours of Union finance minister, Mr Pranab Mukherjee, appealing in Parliament to Opposition parties and states for their cooperation to implement GST from next fiscal, saying this indirect-taxes reform measure would help arrest fluctuation in the general price line.
GST will replace the excise duty and service tax at the Central level and value-added tax at the state level, besides the cess, surcharges and local taxes.
Some BJP-ruled states expressed doubts whether at all GST would be introduced from next fiscal.
Mr Dasgupta said states are against infringement on their financial autonomy and have certain reservations on the draft bill’s provisions for the GST Council and the GST Disputes Authority.
Mr Dasgupta said Union finance minister, of course, would have an exclusive authority with respect to central GST.