The recent statement of Chief Minister V. Narayanasamy that the Centre has agreed to compensate Puducherry a revenue loss of Rs. 60 crore is too premature and unrealistic, the former MP M. Ramadass has said.
In a pressnote, Mr. Ramadass said the actual revenue loss could not be evaluated now but only after the implementation of the GST Bill in April 2017 and the magnitude of the loss would depend on the rates of GST, the volume of goods and services produced and sold and the number of sellers in Puducherry in the post-GST regime.
The revenue loss had to be calculated with respect to all indirect taxes, including Sales Tax, Central Sales Tax, excise duties, and Motor Vehicle Tax.
According to the former MP, even if enhanced exemption limit of Rs. 20 lakh was considered for revenue loss, the actual loss could not be estimated without knowing the number of sellers with this turnover after the implementation of GST Bill which was quite uncertain. In the event of the traders with a turnover of less than Rs. 20 lakh coming to Puducherry in the post-GST period was more, the actual loss might be more than Rs. 60 crore.
In the context of reports that the first meeting of the GST Council held last week was inconclusive on several vexatious issues such as the GST rate — merit, demerit and standard rates — taxes and cess to be subsumed under GST, exempted goods and services from GST, dates on which GST to be levied on petroleum, announcing that the Government of India had agreed to provide a compensation of Rs. 60 crore was like “naming a child which is yet to be born,” Mr. Ramadass said.
He urged the Chief Minister to constitute a working group comprising experts in State indirect taxation and GST to make a fair case for the UT in the upcoming meetings of the GST Council.
