The Gujarat assembly on Tuesday passed the state goods and services tax (GST) Bill in a special one-day session. Admitting that Gujarat would lose some income under GST regime because of the state's dependence on manufacturing, deputy chief minister and finance minister Nitin Patel said the five-year compensation from the Centre should suffice.
Earlier, Parliament had passed four legislations related to GST for a nation-wide rollout on July 1, after which state assemblies were required to pass the state GST Bill. With this, Gujarat joined the likes of Goa, Madhya Pradesh, Uttarakhand and Bihar, among others in passing the state GST Bill.
The state GST Bill was passed almost unanimously with opposition Congress leaders Shankersinh Vaghela and Shaktisinh Gohil seeking certain changes to be presented before the GST Council.
In his address to the house, Nitin Patel said, "GST will abolish all the taxation related disputes between the states and this will make Indian economy more strong. After implementation of GST, the state will lose some tax income but the central government is agreed to provide 14 per cent compensation for five years."
The existing Value Added Tax (VAT) act will be withdrawn after the passing of the new GST bill in the assembly. VAT will continue to be levied on petroleum products such as petrol, diesel, crude oil, natural gas, liquor and aviation turbine fuel (ATF).
According to Saurabh Patel, former energy minister in the Anandiben Patel regime, two per cent central service tax (CST) on petroleum products will continue under the GST regime, with the state unlikely to lose on account of GST due to the presence of refineries in Gujarat.
Commenting on the state GST Bill, Vaghela said, "BJP had opposed us on several fronts including GST Bill when Congress as the ruling party at the Centre wanted to pass the same. The bill was recently passed in the Rajya Sabha thanks to former Prime Minister Manmohan Singh. We are thinking beyond party interest and in the larger interest of the nation, we are supporting you to pass the bill in Gujarat assembly."
The opposition Congress also suggested that GST should not be more than 15 per cent.
"GST was born during Congress days but we are thankful that BJP has now affirmed it. Nearly 190 countries across the globe have GST or similar taxes where the same has been capped at 14.5-16.8 per cent even in high-income countries. We suggest to cap GST in a limit of 15 per cent," said Congress leader Shaktisinh Gohil.