Andhra Pradesh Finance Minister Yanamala Ramakrishnudu has expressed concern that the proposed Goods and Services Tax (GST) might have adverse impact on State’s revenues and sought explicit constitutional provisions to protect its interests.
Speaking at a meeting of Empowered Committee on Goods and Services Tax, comprising all State Finance Ministers held at Delhi on Thursday, he said though the Government of India (GoI) had to reimburse Rs.12,050 crore, which was Central Sales Tax (CST) forfeited by the State since 2009-10, no reimbursement was received. He expressed fear that similar fate might befall GST and wanted explicit transitional provisions to be incorporated in the Constitution to protect the State’s interests when GST is introduced.
The Finance Minister, however, welcomed the proposal of the GoI to introduce GST and termed it as a far-reaching reform in the Centre-State fiscal relations.
He categorically stated that petroleum products, alcohol, tobacco, food products and food grains should be kept out of GST’s purview. He also highlighted the need for absolute clarity on the role of GST Council and expressed apprehension that there could be a conflict between the roles of Finance Commission and GST Council. He said relative roles and responsibilities of the Finance Commission and GST Council should be mentioned with absolute clarity in the Constitutional amendment. He said Andhra Pradesh was assured that Special Category Status would be conferred and wanted it to be treated on par with other similar States mentioned in the proposed 115 Constitutional Amendment Bill in so far as GST was concerned.
He said the draft 115 Constitutional Amendment Bill has to be studied in greater detail and the Andhra Pradesh government’s views to the Empowered Committee would be communicated on dual taxation, threshold and other issues. A committee of the State officials would study various aspects of the proposed GST in detail.
State Principal Secretary Finance P.V. Ramesh attended the meeting.
