Telangana State for Centre to bear loss on GST account

“We plan to put forth suggestions to the Centre. We will seek payment of tax dues pending to the state to the tune of about Rs 3,000 crore, and request the Centre to bear any loss due to implementation of the GST and excise revenues should not be clubbed with GST,” Mr Rajender said.

GST (Goods and Services Tax) is a Value Added Tax proposed by the Centre to replace all indirect taxes levied on goods and services by the Centre and state governments. It is essentially a tax only on value addition at each stage, and a supplier at each stage is permitted to set-off, through a tax credit mechanism, the GST paid on the purchase of goods and services is available for a set off on the GST to be paid on the supply of goods and services.

The consumer will thus bear only the GST charged by the last dealer in the supply chain, with set off benefits at all the previous stages. State finance ministers are meeting to iron out differences before the early roll-out of the GST regime.

Union Finance minister Arun Jaitley recently said the government would focus on the roll-out of GST. The GST will subsume indirect taxes like excise duty and service tax at the Central level and VAT on the state level, besides local levies.

The Constitutional Amendment Bill, prepared by the previous UPA government in 2011 to pave way for rolling out GST, is yet to be passed. The GST roll-out was held up on account of differences over contentious issue of Central Sales Tax (CST) compensation and design of the GST structure between the states and the Centre. States are opposing the inclusion of petroleum and alcohol in the GST.