Kerala is fully equipped
to change over to the goods and services tax (GST)
regime from the beginning of 2010-11, if the Union
government can work out a consensus on it among the
States, Finance Minister T.M. Thomas Isaac has said.
Speaking at a workshop here on the GST here on Tuesday,
Dr. Isaac said that e-filing and e-payment facilities introduced earlier this
year would help Kerala ensure a smooth transition from the existing system to
the new one. All that remained to be done in the State was put the officials
through a round of training.
Being a State receiving bulk of the items for its consumption from other States,
he said, Kerala will benefit to a certain extent by the GST system since it
envisages transferring a portion of the tax collected at the manufacturing end
to the State that consumes the goods. On the flipside, the State will lose out
on the purchase tax revenue from items such as rubber produced here and consumed
by other States.
Dr. Isaac said that it was, however, unlikely that the GST regime could be
introduced by the beginning of the coming financial year, since there were
differences of opinion among the States about its broad format.
The system basically aimed at doing away with several kinds of levies on goods
and services, charged by the Union government and the State governments, and
bringing them all together under a single new levy that would be shared by the
governments.
Dr. Isaac said that Kerala was of the view that the Union government should hand
over excise and service taxes entirely to the States. The revenue from these
sources now accounted for only 20 per cent of the Centre’s tax receipts.
The Finance Commission could work out a formula to adjust the States’ share of
the Central taxes accordingly, he said.
Dr. Isaac said that the collections by way of corporate, customs and personal
income tax would leave the Centre with sufficient resources to carry on the
Centrally-sponsored development programmes.
