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The Minister, who was
participating in the meeting of the Empowered Committee of State Finance
Ministers held in New Delhi, once again reiterated the claim of the State for
adequate and continuous compensation on account of loss of purchase tax on
foodgrains under the proposed GST regime.
He emphasized the fact
that the State contributes significantly towards the Central pool, which has
enabled the country in achieving self sufficiency in production of foodgrains
and this excess production of foodgrains comes at a heavy cost to the Government
exchequer.
He said that tax levied
by the local bodies should not be subsumed under proposed GST and that tax on
Alcoholic Beverages and on petroleum products should be kept out of purview of
GST. Regarding composition and compounding scheme, he was of the view that
composition scheme for trades like Brick Kiln Owners (BKOs) and plywood
manufacturers should continue under GST regime as well and the composition
scheme should not exclusively be linkled only to annual turnover. Composition
scheme for trades like BKOs and Plywood manufacturers has been easier to
administer, he added.
As to the levy of Inter
State Goods and Service Tax (IGST) on inter-state transactions, the Minister
suggested for an impartial authority comprising of representatives from Centre
as well as the States to administer the levy and adjustment of IGST realized on
Inter-state transactions. As to the CST compensation for the year 2010-2011, the
Finance Minister was of the view that mechanism of CST compensation for the year
2010-2011 should be the same as adopted for the previous year that is 2009-2010
since the compensation of the revenue loss incurred by the States on account of
phasing out of CST is must for smooth transition from VAT regime to GST regime.
Source: India News, India, dated
22/05/2010
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