"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 — a mere 30 per cent of what it mops up as tax; it should not be less than 50 per cent, according to Raghavji.

Madhya Pradesh has added Rs 6,000 crore to its kitty from VAT. But the state has reported tax evasion even after the implementation of the tax. It had to pass a Bill in 2007 and has switched to the tax deducted at source system instead of VAT to check evasion, particularly in soyabean trading.

The state government has also introduced a modified "Write-Off" clause in the VAT system. In a number of cases, companies have not paid taxes and have entered into litigation after getting "sick" or "closed" status. Soya trading firms have been reportedly big offenders in this regard.