State may seek push back of GST rollout

Council to be asked to address grievances of all traders, says Eatala

At the crucial GST Council meeting on June 3 to discuss left over items from tax bracket, the Telangana government will make a case for postponement of roll out of Goods and Services Tax from July 1 till the grievances of all sections of traders were addressed.

We will press for postponement of the roll out by a month or 15 days in the interest of perfect grounding of the new tax system, Finance Minister Eatala Rajender told a press conference on Wednesday in the light of a bandh observed by hotel industry in Telangana on Tuesday against high GST rates on it.

Mr. Rajender said postponement will be one of the five demands to be placed by Telangana government at the Council meeting. The others will be to seek a practical taxation system without scope for tax evasion, taxation on end product and not their components and reduction of dosage on commonly used goods by public. The government will also demand that the grievances of traders be addressed before the GST came into force. Therefore, the need for postponement.

Tax slab

The Minister added that the Telangana government will want most of the items to be taxed in the range of 5 to 12 %. This was important for the State because it was not strong in manufacturing sector where heavy dosage of taxation could be considered. Telangana was identified with services sector which required lower level of taxes.

The concerns of real estate, hotel, granite, cotton and fan manufacturing industries which were exposed to unrest in Telangana will be highlighted at the Council meeting.

The Centre will be told that tax evasion should be checked by introduction of GST but not subject traders to agitation. The objective should be to bring all sections of traders into tax net rather than impose higher taxes.

In Telangana, Mr. Rajender said 95% of rice traders evaded payment of 5% tax on their commodity. They demanded that the rate be restricted to 1% in which case they promised to see that the tax revenue to government from rice was 500 times more.

Taxes on some of the items were impractical to raise because the State governments were already collecting value added tax on them at the rate of 14.5% in addition to Central Excise of 12.5%, aggregating to 27%. Such items were straight away put in 28% slab under GST, he added.