Several States, on Monday, opposed inclusion of petroleum products and liquor under the proposed Goods and Services Tax (GST) regime as the move would severely affect their revenues.
This came out at the meeting of the Empowered Committee of State Finance Ministers, which deliberated the revised draft of the Constitutional Amendment Bill for introduction of the new indirect tax regime, among other things.
Some States also expressed their reservation to inclusion of ‘entry tax’ under the GST fold.
While the Centre wants liquor and petroleum products to come under the GST, States are keen to retain their power to tax these items as they are major sources of revenue.
“Most States...majority of the States, have opposed bringing petroleum products and liquor in the GST framework. They want to keep (the two items) out of GST,” Empowered Committee Chairman and Jammu & Kashmir Finance Minister A. R. Rather told reporters after the meeting.
He did not provide names of States opposing the move.
Only 10-12 State finance ministers, he said, could present their views due to ‘paucity of time’, and the remaining States would get chance in the next meeting scheduled in November.
“The Empowered Committee has not completed its discussion on the revised Bill. We will try to conclude the discussion in the next meeting,” Mr. Rather added.
In the revised draft of the Bill circulated to the States on September 18, the Centre had proposed inclusion of petroleum and liquor under the GST.
To a question on when the new indirect tax regime would come into force, Mr. Rather said he could not give any timeline.
“...for passing a Constitution Amendment Bill, you need two-third majority. You know under the present circumstances to get two-third majority is a Herculean task for the government,” he said. — PTI