The Gujarat government is strongly opposed to the provisions in the proposed Goods and Service Tax council (GST) as part of the ammendment to the proposed constitutional ammendment related to the implementation of GST that are aimed at throttling financial autonomy of the state government, Minister of State for Finance Saurabh Patel said.

"The principles on which this council should work, as enumerated in clause 4 of the article 279 (A) does not refer to the development needs of state and fiscal autonomy of state legislature adding these principles should be bedrock of any such council," Patel told PTI.

Patel favoured rotating chairmanship of the council, so that even smallest state of the country gets to head such a vital body.

The powers of determining rate of taxes shall remain within the legislative and administrative purview of states and cannot be ceded to the council as it will take away entire financial autonomy of the states, he said.

"The GST council can deliberate on issues related to common IT platform, inter-state trade and commerce issues that crop up on account of such a law," Patel said.

Also sub clauses (a), (b), (c) and (d) of clause-3 of the article 289 (A) should remain within the purview of parliament or state legislature as the case may be, he said.

"We also do not support omnibus special clause, namely any other matter being placed within the powers of GST council," Patel said. .


In support of demanding protection of state revenue, Patel pointed out that completely phasing out of CST compensation will cause a loss of Rs 5,000 crore to the Gujarat state based on 2007-08 revenue.

"Unless an upfront compensation is built into the scheme of GST, it would be very difficult to retain financial autonomy of the states and some states may even face huge revenue deficits as compensation does not come in time," Patel said.

He also wanted empowered committee of state finance ministers to work closely with the government of India, to put a suitable IT platform in place, resolve CST compensation issue, commission a study of impact on inflation of GST on prices among others.