The State government has expressed serious reservations on the definition of territorial waters given in the model Goods and Services Tax (GST) Law by the Centre.
Raising objections to the decision to treat territorial waters as the territory of the Central government, the State government pointed out that the matter was pending before the Apex court.
Finance Minister Yanamala Ramakrishnudu wrote a letter to the GST Council Chairman on Tuesday elucidating the State government’s stand on the territorial waters and also cross empowerment to State officers under the the IGST Act.
The Minister said that the issue of taxation powers of the States in the territorial waters within 12 nautical miles came up for discussion at 10th meeting of the GST Council held at Udaipur on draft model GST law and draft compensation law vetted by the Law Ministry.
It was necessary to treat territorial waters as the territory of the State and to allocate powers not merely to collect but also levy, collect, and appropriate the taxes on these transactions to the States treating them as intra-State transactions.
Single interface
If such powers are not granted to the State authorities, it defeats the principle of single interface.
The States too will be deprived of jurisdiction on transactions, which involve huge refunds.
“Hence, the stand of the State of Andhra Pradesh is that the State authorities should not be excluded from adjudicating the cases involving Exports/Imports under the IGST Act,” he said.
The argument that only Central Customs officers can administer Customs Act was incorrect. The Centre’s argument that Central Customs officers alone can adjudicate the issues relating to Exports/Imports under the IGST Act was not correct as the State authorities would examine whether the transactions were exports/imports or not, based on the documents furnished by the tax-payers, but do not interfere in the valuation adopted by the Customs authorities, he pointed out.
“The opinion of the State of Andhra Pradesh may be considered before taking final decision on these two issues,” he added.
