Hyderabad: AP finance minister Yanamala Ramakrishnudu expressed disappointment that the GST Bill, passed by the Lok Sabha on Wednesday, did not include issues raised by him at the empowered committee meetings on the legislation.
Mr Ramakrishnudu said that the committee meeting which is going on in Thiruvananthapuram was crucial, since the 122nd Constitution Amendment Bill 2014 which has far-reaching implications on the economy of the states, may be passed any time by the Rajya Sabha.
Despite being a friendly party, the TD government is opposing the Goods and Service Tax Bill in its current form. He said if it was passed, it might go against the spirit of fiscal federalism.
He said the Centre was lukewarm to the unanimous resolution of the empowered committee that favoured a constitutional guarantee against loss of revenue to the states in case of implementation of GST
He said there were reasons to fear that the states would be at the mercy of the Centre for GST compensation, as has been the case with central sales tax.
For this reason, the committee had sought explicit provisions in the GST Bill to protect and preserve fiscal autonomy of the states.
He demanded a clause to empower state governments to administer GST on interstate trade and commerce, levied under clause (1) of Article 269A (IGST).
He said the proposed constitutional amendment empowers the Centre to levy tax on tobacco and tobacco products in addition to GST, but the same power has been denied to the states.
This would entail substantial revenue loss to the states. Similarly subsuming advertisement tax, betting and gambling tax would have adverse impact on the fiscal health of the local bodies
