GST council compromises autonomy of states: TN
Chennai: Continuing its opposition to certain provisions of the GST Bill, Tamil Nadu on Tuesday batted for continuation of the Empowered Committee of State Finance ministers as against the GST Council, which is being proposed as a constitutional body by the Union Government.
At the meeting of state finance ministers in New Delhi chaired by Union finance minister Arun Jaitley, commercial taxes minister K. C. Veeramani said the GST Council, if set up, would "compromises the autonomy of the states in fiscal matters."
"We believe that the existing mechanism of the empowered committee of state finance/taxation ministers would be adequate. Furthermore, I wish to point out that the decision making rule and the voting weightage give the Government of India an effective veto in the GST Council. Besides, no distinction is made amongst the States in the weightage," Mr Veeramani said.
He said if at all a Council is formed, the weightage of the vote of the Central government should be reduced to one-fourth of the total votes cast and that of the States should be correspondingly increased to three-fourths of the total votes cast.
"Further, the weightage of each state's vote should be in proportion to the representation of each state in the council of the states. This is important as the changeover to GST has different implications for different States based on their size and reliance on own tax revenues," he said.
The state has been consistently opposing the GST saying it would incur huge financial loses on a manufacturing state like Tamil Nadu. Chief Minister J. Jayalalithaa had on several occasions opposed the GST Bill in its current form and had even petitioned Prime Minister Narendra Modi demanding that the amendments proposed by her should be included in the Bill.
Mr Veeramani said Tamil Nadu also wants petroleum and petroleum products be permanently kept outside of GST in view of the revenue impact and the positive environmental and social impact of high effective taxation on these items.
"Similarly, the Constitution Amendment Bill on GST should provide for an enabling provision for the States also to levy higher taxes on Tobacco and Tobacco products over and above SGST similar to what has been permitted to the Centre on account of the public health concerns," he said.