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Arun Jaitley advises West Bengal about GST

West Bengal says cannot back introduction of GST in April any more
Arun Jaitley : Union Finance Minister

With the uproar created by West Bengal and its finance minister saying that Bengal can’t back Goods and Service Tax anymore, Arun Jaitley, Union finance minister has offered his blunt advice to the opposition led state.

In the Hindustan Times Leadership Summit, Jaitley was in conversation with Vikram Chandra when he said, “If some states are seen as opposing every reform, then investors in this country and outside will decide which states to invest (in).” The allusion to Bengal was clear at a time when it is aggressively wooing industry.

On the subject of GST, he said that it’s a constitutional need to implement it by September 2017, as country cannot function without taxes.

In talks with NDTV, Amit Mitra, Bengal’s Finance Minister,had said that the Centre’s shock ban of 500- and 1,000-rupee notes creates an unappetising “double whammy” to states already confronting a loss of revenue when GST replaces a pile of levies imposed by them.

When asked if the centre had calculated the impact on states of “two big-bang reforms”, Jaitley said “Well, at least it is being acknowledged that we are bringing in big bang reforms.”

He also stressed, “The Constitution does not provide for delay in GST” which has been cleared by parliament as law. The government hopes to clear supporting legislation for the reform in this session of parliament.

Mitra, like his counterparts from other states, is a part of the decision-making body of the GST Council, which is finalising the rate and scope of the tax that will unify the country into a single market, making business much easier for manufacturers by removing taxes when goods move between states.

Mr Mitra said that Prime Minister Narendra Modi’s abrupt demonetisation drive has crunched the economy in states. According to him, this step leads to states losing money ahead of the introduction of GST, planned for April. It is to be noted that states are to be compensated for the next five years by the centre for the money they will lose from their taxes being removed.

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