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“The Centre has proposed
to introduce single slab of GST and impose 16 per cent tax on all edibles like
sugar, pulses and edible oils. The Centre is making a populist decision. It has
also turned down the state’s demand of paying compensation against central sales
tax for 2009-10 and 2010-11,” state Finance Minister Raghavji said. He recently
participated in the empowered committee meeting on GST in New Delhi.
The minister said earlier the Centre had floated a “white book” concept for GST
and accordingly there were two slabs. “We had supported the Centre on excluding
electricity duty, stamp duty and motor vehicle tax out of the ambit of GST, but
now the Centre wants the single tax system. The single slab will strip us off
imposing taxes,” Raghavji said and pointed out, “The direct tax revenue of the
states, after opening up of economy, has gone down from 0.2 per cent to 0.1 per
cent while indirect tax revenue has gone up from 5.1 per cent to 6.4 per cent.
Normally, direct tax revenue share in tax collection is always 70 per cent and
above. The Centre must provide more rooms to levy indirect taxes.”
He advised, “The Centre and state revenue sharing in direct taxes should be in
ratio of 40:60 and not 50:50 as proposed in the GST. The National Institute of
Public Finance has also advised to remove Central sales tax from declared goods
as these goods are used by household. The Centre must put these commodities
under ambit of the state tax system,” he said.
Demanding immediate compensation from the Centre Raghavji said, “The Centre must
entrust the task of collecting tax in road transportation, education and other
financial services to the states. It will provide an alternate means of
compensating states against Central sales tax, which was slated to be brought
down to zero per cent this year.”
Source:
Business Standard, India, dated
12/02/2010
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