When Congress states opposed GST in 2013, and why BJP states are now ok with it

Besides being filled with habitual liars, Indian MSM is also full of incompetent journalists. We had mentioned earlier how Indian TV Anchors are Jack of All Trades, how a journalist can be an expert on topic A and then on topic Z effortlessly. And this phenomenon has been highlighted in how Indian Media has responded to the new GST law which is being introduced.

The GST Act has not been even drafted as of now, only a bill to give powers to draft the bill is in the Rajya Sabha, yet you see various bogeys being raised by some journalists. We had already clarified on most of the technical issues of the proposed GST act here.

Now, to defend Congress’s stalling of this crucial bill, Indian MSM has started a new narrative: “But BJP states (including then Gujarat CM Modi) had opposed GST for many years during UPA rule, why this U Turn now? Wasn’t GST important then?”

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Either half-knowledge or an intention to deliberately misguide the public can be behind this hilarious reasoning because the facts simply do not support this. So is there any truth in this claim that Modi and BJP had made a U Turn? Not really.

It is a fact that many states, including BJP ruled states had opposed the GST bill under UPA rule. But were only BJP states opposing GST? Lies. Even as late as December 2013, just 4 months before end of UPA’s 10 year rule, it was reported that the Congress-led ruling UDF government in Kerala has lent support to the Gujarat government’s apprehensions on GST. The Finance Minister of Kerala raised questions on numerous concepts under GST on which there was no consensus nor clarity. He was “openly critical of the Centre’s inability to give any “definite information” about the service tax currently received from each state or any projection about future revenues expected

In October 2013 also, a report in The Hindu quoted the Jammu and Kashmir Finance Minister (who also served as GST Empowered Committee Chairman) as saying this:

Most of the states…majority of the states have opposed bringing petroleum products and liquor in GST framework. They want to keep (the two items) out of GST,

Does the phrase “Most of the states” mean “only BJP states?”. Even when, at that point in time, Congress was ruling a considerable number of states, unlike now?

Again in July 2013 it was reported that 3 non-BJP states had opposed a provision in the GST Bill. Which were these 3 states? Non-BJP ruled Tamil Nadu. Non-BJP ruled Orissa. And Congress ruled Maharashtra! So if this GST bill was opposed only on political grounds, why did Congress’s own state Maharashtra oppose it then?

Even in May 2013, the then Chairman of the Empowered Committee of State Finance Ministers on GST Sushil Kumar Modi revealed that “Even Congress ruled states like Haryana and Maharashtra are opposed to it (GST) fearing loss of revenue,”

So it is clear that even in the last one year of UPA, at least 5 Non-BJP states had voiced their opposition to the UPA’s GST bill, and out of these, 3 states were Congress ruled states. So why is Indian MSM crying hoarse that only BJP had opposed GST? Isn’t it clear that BJP and non-BJP states i.e. most states in India were opposed to UPA’s GST bill?

Now that we know which states were opposed to UPA’s GST bill, it is important to know the reasons for opposition. We had reported on this in December 2014 itself, but since MSM is repeating a lie a thousand times, we may have to repeat the truth at least a few times. 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

The rationale behind these demands is quite understandable. GST wipes out most state-level indirect taxes, thus taking out one 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.

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

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. But Indian MSM who have become Congress spokespersons are desperate to spread the lie that this is change in stand is only politicking.

co-founder, OpIndia.com

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