It is disappointing that the Goods and Services Tax (GST) is yet to be implemented. The most significant process of the financial reform gets a jerk when Bihar Deputy Chief Minister Sushil Kumar Modi, being the Chairman of an Empowered Group of Finance Ministers on GST that is steering the transition to the single GST regime, has written a letter to a dozen of CMs stating their rights of the tax. In these letters, Modi has appealed all the states to put pressure on the Centre to reduce the burden of incurring a huge amount of Central Sales Tax (CST). It is true that in order to adopt the GST, the state governments have reduced the sales tax from four percent to two for which they have incurred a huge amount of revenue loss. At the same time, the promises made by the Centre were not fulfilled to bridge the revenue gap of the states. That does not mean that to solve the crisis of the revenue loss, the state governments have to mount pressure time and again on the Centre. It is natural that the state governments demand explanation from the Centre about the revenue loss. It cannot be said at this critical juncture that the Centre, which already owes Rs 19,000 crore to the state governments, can return the amount to them. There are a lot of challenges before the state governments, but if the relation between the Centre and the states remains indifferent, the woes will be many folded.

The Centre is of the view that up to three years it had to bear the losses incurred on the states due to reduction in CST. Whereas, the state governments say that as the GST is not in place, so they are looking forward to receive the compensation from the Centre. It is an irony that nobody is prepared to find a solution about the fact that why the GST has not been implemented yet. As per the earlier anticipation, the GST should have been implemented from April 2010. In this context, one cannot deny that the difference between the Centre and the states is unnecessarily being raked up. No doubt, this is not the first instance where the Centre-State relation has failed in solving a crisis. Basically, due to the state governments’ protest in implementing the policy of Foreign Direct Investment (FDI) in retail sector, the issue has been deferred. Similarly, due to the differences between the Centre and a number of states, the National Counter Terrorism Centre (NCTC) has also been put on the backburner. Will it be correct to say that the national interest have suffered for mere political gains? For a common man, the GST means that all the indirect taxes will be subsumed into one tax. This is a practice in more than 150 countries. India implemented VAT (Value-added tax) in 2005. After VAT, GST is the next stage. Once GST is implemented, the tax load on consumer items will be lessened because. It will also check tax evasion.