The Empowered Committee of State Finance Ministers will meet in New Delhi on December 14 to discuss State-wide strategies for liquor, petrol and diesel and stamp duty which are State revenue sources outside the Goods and Services Tax (GST).
In the wake of proposals to bring petrol and diesel too under the GST purview, the meeting assumes importance.
The meeting to discuss State revenue resources will be held after the larger annual general meeting (AGM) of the Empowered Committee of State Finance Ministers, Additional Secretary, GoI and Principal Secretaries of finance and Commissioners of Commercial Taxes of all States.
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The AGM will approve the annual report of the empowered committee and the statement of accounts for the financial year 2016-17. The meeting will be chaired by Dr. Amit Mitra, Finance Minister of West Bengal. A week later the meeting of GST Council headed by the Union Finance Minister Arun Jaitley will be held.
Telangana, like other States, at present is not in favour of bringing petrol and diesel under the GST for now as the sales tax earned on petroleum products and liquor is substantial and has been cushioning the loss of revenue from the goods and services brought under the GST.
“The new tax regime be given at least one year time to stabilise before bringing any more changes. The clarity on revenue under GST is expected to come after an year. It was the case in all the countries that implemented GST,” sources said.
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The Centre, under the GST Act, will compensate if any State registered less than 14 per cent revenue growth for a period of four more years.
It is expected that revenue will improve under the GST regime through better tax compliance and bringing businesses hitherto in the informal sector into the formal sector and widen the tax base, sources said.