For an effective GST regime at state level, all the indirect taxes will be merged and there will be a single tax structure.
"How can we ask traders and businessmen to switch to another complicated tax regime when they have yet to accustom themselves to the VAT system? Why does the Central government ape demand-side economics of Western countries," asked Raghavji, MP finance minister while speaking to Business Standard, adding, "India has its own traditional accounting system and all states have a lot of leeway after the implementation of VAT. There will be pro rata increase in prices if we impose more taxes. At least Madhya Pradesh is not ready to adopt GST."
GST includes service tax and states get no share of it, according to Raghavji.
The Central government, he says, should consider the state's problems. The Centre still retains a lion's share of taxes on the concurrent list. States like Madhya Pradesh face difficulty in terms of managing the huge forest cover, but in lieu of that it receives only a pittance