Reluctant to welcome the goods and
services tax (GST) by April 1, 2010, certain states have made it clear that its
introduction could potentially bleed their exchequers dry. Adding fuel to the
fire is Congress-ruled Haryana, which has pointed out that it is a
destination-based tax, export of foodgrain to other states would attract GST and
could render the entire exercise unprofitable.
Both
Haryana and Punjab have raised objections citing that
they would lose a large chunk of revenue garnered from
imposing a minimal tax on foodgrain and other
agriculture produce within their territorial domain.
Jharkhand and Chhatisgarh have also expressed
reservations over the loss of revenue on minerals
produced and supplied by them to other states.
Adding to the confusion is a letter written by the
Madhya Pradesh government opposing the tax altogether.
“Madhya Pradesh has written to the finance ministry
stating that GST is a regressive tax as it will reduce
the tax rates on luxury goods and increase that on items
of mass consumption,” a senior government official told
The Indian Express. The government wants to negotiate
compensation with these states for loss of sales tax
revenue, the official added.
