The
Empowered Committee of Kerala Finance Ministers, meeting
at Kovalam, near here, on May 5, will discuss policy
issues related to the proposed introduction of goods and
services tax in 2010-11. The meeting is also expected to
thrash out differences between the Centre and States on
the proposed reduction of Central sales tax from 3 to 2
per cent.
Kerala
Finance Minister T.M. Thomas Isaac told journalists here on
Friday that the goods and services tax was proposed to replace
excise duty and service tax, collected by the Centre, and
value added tax (VAT), collected by the States. Kerala wanted
the new tax to be shared in a fair manner. It was not just
sufficient that the States did not suffer any revenue loss
under the new regime. The service tax, now being collected by
the Centre, actually belonged to the States.
The
Minister said the meeting would discuss items to be excluded
from the goods and services tax. Kerala was for excluding
petroleum products and liquor. An understanding would have to
be evolved on the goods and services on which the Centre and
the State should collect the tax. He said the reduction of
Central sales tax, proposed for this year, had been put on
hold as that would cause losses to States, especially those
with higher production. The Centre had suggested an increase
in VAT rates and the tax on textiles to offset the loss.
So
urce
: The Hindu BusinessLine,
India, dated 03/05/2008
