Finance Minister Yanamala Ramakrishnudu expressed his reservations on the issue of taxation powers of the States within 12 nautical miles of the territorial waters, at the 10th Goods and Services Tax (GST) Council meeting held at Udaipur in Rajasthan on Saturday.
Mr. Ramakrishnudu said that the delegation of powers to States to collect taxes on the basis of the proposed treatment of territorial waters as the territory of Union of India was not correct particularly when the matter is pending in the Supreme Court.
He asserted that the proper way of going about it is treating the territorial waters as the ‘territory of States’ and allocating powers to them not just to collect but also to levy, collect and appropriate the taxes. According to an official release, the GST Council chairman agreed to refer the matter to the Law Committee for examination.
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Cross empowerment
On the issue of cross empowerment to State officers under the Integrated Goods and Services Tax (IGST) Act, he said the proposal to exclude the State authorities to adjudicate cases involving import or export of goods or services was to be debated.
He further observed that the State authorities have been administering Central Sales Tax Act, 1956 and assessing the genuineness of exports as it involved the refund of taxes paid in the input stage. Under the IGST Act also, the State authorities have to be empowered to ascertain the genuineness of such export transactions.
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The Council agreed to refer it to the Law Committee and to take a decision at the next meeting.