Difference between UPA GST and NDA GST
Why BJP / Modi opposed GST in UPA regime?
Till the last discussion of GST under UPA in November 2013, the states had some major demands:
1. Keeping Petroleum out of GST ambit
2. Keeping Alcohol out of GST ambit
3. Keeping Entry Tax out of GST ambit
4. Some sort of guarantee from Centre for potential revenue loss
2. Keeping Alcohol out of GST ambit
3. Keeping Entry Tax out of GST ambit
4. Some sort of guarantee from Centre for potential revenue loss
The rationale behind these demands is quite understandable. GST wipes out most state-level indirect taxes, thus taking out one of the major source of revenues for states. It is like a parent tells a child to stop earning from today, and instead promises him a sum of pocket-money. To have at least some financial independence in their hands, States asked for items like petroleum and alcohol (which have huge sales) to be kept out of GST, and also a guarantee from the Centre to offset their losses.
As explained by Congress Spokesperson Priyanka Chaturvedi in her tweet,Chidambaram the then Finance Minister never considered the states demands.
He even openly rejected the 1%
additional levy (which was mooted as a compensation to producer states). This obstinate stand of the UPA was the reason why although it had 10 years, it could never build consensus on GST.
additional levy (which was mooted as a compensation to producer states). This obstinate stand of the UPA was the reason why although it had 10 years, it could never build consensus on GST.
How did the new NDA Government achieve consensus in less than 10 months, when UPA couldnt do it in 10 years? They agreed to the demands of the states. Out of the above 4 demands, 3 were accepted, and a bonus benefit was passed on to the state:
1. Petroleum was kept out of GST
2. Alcohol was kept out of GST
3. A proposal was sent to law ministry to work out a “Constitutional Guarantee” to compensate states
4. And the Bonus: The power to states of levying additional 1% tax levy, for maximum 2 years, to help augment state revenues
2. Alcohol was kept out of GST
3. A proposal was sent to law ministry to work out a “Constitutional Guarantee” to compensate states
4. And the Bonus: The power to states of levying additional 1% tax levy, for maximum 2 years, to help augment state revenues
This is why BJP states, which were opposing the old GST bill, along with non-BJP states, are now agreeing to the NDA’s GST bill, because their concerns have been addressed.
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