Kolkata, June 30 : Alleging that the GST Council’s demand for a white paper on the country’s preparedness for a July 1 roll out of the new indirect tax regime has not been met, West Bengal Finance Minister Amit Mitra on Friday termed as “draconian” a clause on anti-profiteering in the new system that could land traders in big trouble.
“The GST Council said one and a half months back that it should have a white paper on the state of preparedness in the country with regard to the GST roll-out. That would have clearly marked out the areas of shortfall. But till today we have not received it,” Mitra said, launching a blistering attack on the Centre ahead of launching of the new tax system from Friday-Saturday midnight.
He said the GST Council was completely in the dark about the extent to which the country was ready for the new tax system.
“Does GST Council know the state of preparedness? No,” Mitra, chairman of the Empowered Committee on GST, said at a panel discussion on private television channel ABP Ananda.
Claiming that the introduction of GST from Friday-Saturday midnight would lead to “total chaos”, Mitra said the central government would have to take the total blame for the situation.
Referring to deliberations in the GST meetings, Mitra said in the final legislation there was a clause on “anti-profiteering” which was “draconian”.
“It related to areas where the tax rate may go down after GST comes into force. The clause says if the businessman does not pass on the reduction in taxes as a result of the GST to the consumers, he will be charged with anti-profiteering.
“In GST meetings I had asked for an independent body to monitor this aspect. But they have tasked the central government agency CBEC (Central Board of Excise and Customs) with this. Traders are very scared. They may land in a soup,” he said.
Mitra referred to the arrest clause, saying it can cause “major harassment to business leaders, particularly the small and medium, with some sections even being non-bailable”.
“You don’t know who will be arrested.”
“It seems, Inspector Raj is back. The traders have even been asked to maintain an account of their daily stock online. If they do not, the arrest clause can come into play,” he said.
Mitra also alleged that the traders have not been given time to prepare themselves for the GST system.
“The tax rates were fixed by the GST Council only on June 3. Do you think a small trader can engage an accountant and enter everything into the computer system within such a short time?
To buttress his point, Mitra referred to Japan and Germany. “When they went for tax reforms, they gave 12-18 months’ time to traders after fixing the tax slabs.”
Continuing his criticism, Mitra said the final rules were notified only on Wednesday.
“This untimely roll-out will lead to chaos. Small businesses provide for 80 per cent employment in the country. They account for 40 per cent of the GDP. Why didn’t they (the central government) push back the launch date? What is so sacred about July 1?” Mitra wondered.
Mitra said he was apprehensive and concerned.
Explaining the rationale for his party boycotting the midnight GST roll-out event at the central hall of Parliament, Mitra said “I am apprehensive, concerned. (State Chief Minister and Trinamool Congress chief) Mamata (Banerjee) has taken the correct step.
“We don’t want to be a part of their event management exercise and clap by suppressing the pain in our heart and going against our conscience.”
“This is not the GST which we had backed in principle in our party manifesto for (Lok Sabha polls in) 2009. When tomorrow people will suffer, things will be chaotic, then central government will have to take the responsibility.”