GST is an interference in the autonomy of states in a federal system. Imposing indirect taxes comes under the purview of the states. But the Centre has been enhancing the taxes citing GST and claiming to have consensus as most states are being ruled by the BJP. This is not acceptable – said Karnataka’s Congress Legislature Party leader Siddaramaiah, alleging the Centre was burdening the common man.
A day after the Group of Ministers on GST headed by Karnataka Chief Minister Basavaraj Bommai submitted its interim report on rate rationalisation at the GST Council Meeting chaired by Union Finance Minister Nirmala Sitharaman in Chandigarh, Siddaramaiah expressed his displeasure over the tax hikes.
Echoing the sentiment shared by the Opposition-ruled states and the Congress, which have been seeking continuation of compensation to states for revenue loss beyond the five-year period that ends this June, Siddaramaiah said, “With this, the 14 per cent GST compensation to the states has come to an end. When the inflation is high they should have reduced taxes. But they have increased GST. Despite our pleas, the Centre has not extended the compensation period. The BJP government has hiked the taxes that impact the common man, it has generously reduced the corporate taxes from 30 per cent to 22 per cent to benefit the corporates’ lobby.”
Citing an example, Siddarmaiah, who has tabled at least 13 state budgets in his political career said, the GST on flour mills had been hiked from 12 per cent to 18 per cent, kilns – 5 per cent to 12 per cent, LED bulbs and inks – 12 per cent to 18 per cent, on submarine pumps, fruits and vegetable segregation and grading machines and milking machines – 12 per cent to 15 per cent, on solar water heaters it has been increased from 5 per cent to 12 per cent. And a 12 per cent tax has been introduced on charts, globes and bank cheques. “These hikes are both unscientific and a burden on the poor and the middle class,” explained Siddaramaiah.
Bommai on Thursday informed that the GST Council meeting had discussed the issue of extending the GST compensation and a final decision on extending it would be taken in August. "The GST Legal Committee has taken measures to sort out the legal impediments and the recommendations of the Fitment Committee have been accepted," added Bommai.
Demanding the withdrawal of the tax hike and continuation of the GST compensation to states, the former chief minister said, “The Centre should increase the corporate tax. During the Covid pandemic, the income of these corporates was Rs 33 lakh crore in two years. Now, why should the government not tax them instead of targeting the common man who is already burdened due to rising cost of petrol, diesel, steel and cement. It is a grave injustice to the common man.”
Interestingly, the Council members appreciated the interim report on correcting inversion and pruning exemption list and the Council unanimously accepted the report without discussion on individual points. Representatives from UP and Bihar, much like Delhi said the report was done taking a “balanced view” had been taken by the GoM under leadership of Mr. Bommai in bringing out a report with due “sensitivity to consumers”.