CPM central leadership opposes the GST. Kerala, ruled by the party, welcomes it. CPM says GST undermines federalism. Kerala government says it’s beneficial to the state. CPM demands low GST ceiling, lower than 18%, if possible. Kerala government wants it to be as high as 22%, if not more.
The Left government in Kerala on Friday raised objections to certain proposals in the amended GST Bill, once again exposing the confusion within the Communist Party of India- Marxist (CPM) - at the centre and the state level.
Kerala Finance Minister Thomas Isaac on Friday aired strong reservations over the amendments to the GST bill as passed by the Rajya Sabha the other day. His main objection was the lower cap on the GST that pegged at 18% and demanded that the ceiling rate should be a minimum of 22%, if not more. This goes against the CPM’s official demand for a lower cap. The party holds that a higher cap would result in inflation, while the state government led by it, wants a higher cap so that the state would benefit more!
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Isaac says that a higher ceiling on GST would be beneficial for a consumer state like Kerala. If the tax is kept low, the cash-strapped state, would find it difficult to mobilise resources to implement welfare measures.
In a letter to the Union Finance Minister, Isaac alleged that the central government failed to stick to the consensus reached during the meeting of the state finance ministers on GST. To go by the GST amendment, the states will be deprived of the Integrated Goods and Services Tax revenue of unclaimed credits in transactions, not forming part of the divisible pool. “The bill departs from the consensus arrived at the Empowered Committee of State Finance Ministers, much to the detriment of the interest of the States,” Isaac wrote.
At a time when the CPM opposed the GST saying that it would be detrimental to the federalism in the country, Kerala Chief Minister and Finance Minister had welcomed it.
“ … you are only widening the hiatus between the two Indias and that is not the spirit which our Constitution enjoins us to come to this House to legislate,” CPM General Secretary Sitaram Yechury had said in the Rajya Sabha during the debate on the GST.
When pointed out the divergent views within the party, Yechury said that the party would discuss the matter and reach a final decision soon.
