'As trust deficit is over, GST will be reality'

With change at the Centre, Gujarat government on Friday said the “trust deficit” between Centre and states, which was delaying GST roll out, has been removed and hoped the new indirect tax regime could become a reality soon.

Rejecting allegations by the previous UPA regime that Gujarat was hampering progress on Goods and Services Tax, the state Finance Minister Saurabh Patel said several states including Congress ruled ones had issues and did not have faith in the then central government addressing them.

“One thing is that states never completely objected to GST. Even Gujarat never also objected to what it was. In all our meetings we were assured by the Centre that CST compensation is going to be given. Unfortunately it was never passed on. So what resulted was lack of faith between the Centre and states. So the trust deficit arose because of non implementation of promises," Patel said.

Patel said things have changed and there is no trust difference between the Centre and states over crucial issues on GST.

“Now after Arun Jaitley became Finance Minister, he has assured us and also put in his budget speech that states interest will be looked after. So we are very confident, at least Gujarat is confident, that the interest of states will be protected," the Minister said.

When asked by when GST could be rolled out, Patel said it might take time, but if everything falls in place, Jaitley’s “intention can be fulfilled.”

The states also demanded legal powers, and not only administrative powers, to collect tax from businesses with an annual turnover of up to Rs 1.5 crore.

Under the dual control of traders - by both the Centre and states - in the GST structure, taxpayers with annual turnover of over Rs 1.5 crore would be taxed by the Centre, which will later disburse to states as their share.