Maharashtra, one of the leading states in service tax
collection with Rs 20,337 crore mop-up in 2007-08, has made a strong pitch for
full GST rollout rather than half-hearted efforts. The state government, which
has been engaged in the formulation of the GST road map, has appealed to the
Centre to address issues related to separation of services, goods, the tax
threshold level, two-rate structure and dual authority for each dealer. The
government also sought the Centre’s intervention to settle the contentious issue
of revenue-neutral rate calculation.
These issues were brought
up for discussion during a comprehensive presentation on
Friday made by the state sales tax department to chief
minister Ashok Chavan. A state government official said,
“The Maharashtra government is of the view that instead
of dual authority for each dealer, there should be a
distribution between the Centre and states. A
manufacturer who pays a central GST (CGST) of 12.5%
would also have to pay a 12.5% state GST (SGST) under
the mechanism. Also, the trader would have to bear an
equal tax burden, though it may be reimbursed via input
credit tax. There should, therefore, be a single rate.”
The state government favours no distinction between
goods and services and a common threshold.
The state government has also made a strong argument in
favour of quick compensation mechanism from the Centre
and to lower CGST rates. Further, there should be strong
computerised clearing house mechanism under RBI and
dispute settlement mechanism, the state opines.
The state government observed that the introduction of
GST regime would be possible from April 1, 2011, against
the deadline of April 1, 2010. No deviation be permitted
without approval of finance minister’s council and
purchase tax be subsumed, the state pitched. The
official said the state government has argued that
natural gas be kept off GST and exemption for goods of
local importance be decided only by the FM’s Council and
not by states.
