CHENNAI: On Thursday, The Government of Tamil Nadu suggested that all states implement the new Goods and Services Tax(GST) from September 2017 after resolving all outstanding issues.
Addressing the first meeting of the GST Council held in New Delhi under the chairmanship of finance minister Arun Jaitley, the representative of Tamil Nadu and school education minister K. Pandiarajan said that the weightage of the state’s vote should be in proportion to the representation of that particular state in the Rajya Sabha.
When the GST Bill was put to vote in Rajya Sabha last month, The AIADMK party had raised the issue. The Central Government has proposed to implement the GST with effect from 1st April 2017, but many critical aspects of GST such as consensus on the list of exempted goods and services, threshold limits, GST rates including the floor rates with bands, GST laws, administrative arrangement and compensation mechanism, remain unresolved.
Mr Pandiarajan said that as things stand at present it seems extremely difficult to meet the time lines indicated. As per the Constitutional Amendment Bill, States have the option to defer implementation till 16th September, 2017.
He added that hence we would strongly suggest that all the states may implement GST from a common date preferably 1st September, 2017 after resolving all outstanding issues.
Noting that Being a manufacturing state – Tamil Nadu stands to lose huge revenue if GST is implemented, he said that the revenue to be compensated should pertain to all taxes subsumed under GST. This would exclude alcoholic liquor and petroleum for human consumption.
An HR Expert – the minister said that the base year for calculation of GST compensation has been suggested as 2015-16. This is acceptable.
He said that the state proposes that the compensation amount due to the State should include the compensation received for Central Sales Tax to arrive at the growth rate and the projected revenue.
He said that if the states are not given the adequate fiscals and powers resources, the co-operative federalism may degenerate into empty rhetoric. The co-operative federalism should not become a catchword to impose uniform administrative practices across the country without due regard to the specific of the socio-economic situation in each state.