The Empowered Committee of State Finance Ministers on GST will meet in Shillong on November 18 and 19 and may firm up views on issues concerning the taxation of liquor and petroleum products in the proposed Goods and Services Tax regime.
“The EC will meet in Shillong on November 18-19 and issues concerning taxation of liquor and petroleum products are expected to figure in the meeting,” said a senior Finance Ministry official.
At its last meeting on October 21, several states had opposed the inclusion of petroleum products and liquor in the proposed indirect taxes regime as the move would severely affect their revenues.
Some states had also expressed reservations to the inclusion of ‘entry tax’ in the GST fold.
While the Centre wants that liquor and petroleum products should come under the GST, states are keen to retain their power to tax these items as they are major sources of revenue.
The Empowered Committee Chairman and Jammu & Kashmir Finance Minister A R Rather had told reporters after the last meeting that only 10-12 state Finance Ministers could present their views due to “paucity of time” and the remaining states would get chance in the next meeting scheduled in Meghalaya.
In the revised draft of the Bill circulated to the states on September 18, the Centre had proposed inclusion of petroleum and liquor under GST.
The revised Constitutional Amendment draft incorporates the views of the Parliamentary Standing Committee which had suggested minimum exclusion to ensure an integrated, comprehensive and seamless GST regime.
The issues of petroleum products and liquor have already been deliberated upon by a sub-committee of officials which was set up to study the recommendations of Parliamentary Standing Committee and the revised draft of the Constitutional Amendment Bill, and suggest ways for reconciling different positions.
The roll-out of GST, which will empower the Centre and states to simultaneously tax supply of goods and services, has missed several deadlines due to differences between them over the contentious issues of the CST compensation as well as the design of the GST structure.
The Constitution Amendment Bill was introduced in Parliament in 2010. The government hopes that it will be taken up for discussion in the Winter Session.