From CK Nayak
New Delhi: Meghalaya’s Minister for Taxation, AT Mondal on Sunday made a fervent appeal to the Centre to exempt education including higher education from the tax net to encourage this sector for the overall socio-economic development of the State and the North East region as a whole.
Addressing the meeting of the Empowered Group of State Finance Ministers meeting here, Mondal said the tax exemption to the educational services currently provided by the recognized State and Central Government institutions in the region, should be further extended up to the degree and the diploma level.
“This will encourage and promote education in the backward states to the desired extent,” he said.
Mondal was reacting to the exhaustive ‘negative list’ prepared by the Union Finance Ministry for the Goods and Services Tax (GST) which had brought education including higher education in the tax net. The State Minister argued that in the absence of enough scope for higher education students from Meghalaya and other N-E states were migrating in huge numbers to the metros where they were facing myriad physical as well as mental difficulties starting from ragging to change of environment, not to speak of financial difficulties and other hardships.
To get over this situation the Meghalaya Government is encouraging setting up higher educational institutes both in private and public sector in the State, he said, adding, “This giant effort would be negated if social sector like education is taxed.”
The Union Finance Ministry agreed with his views and decided to consider the same.
As it is, Meghalaya and other N-E states were demanding special dispension for the remote and backward region as far as GST was concerned.
Small states of the Northeast have to get preferential treatment due to certain inherent factors like difficult geography, adverse climatic conditions and land locked position, he argued.
The Union Finance Minister had proposed a three-rate structure for GST – 20 per cent for goods, 12 per cent for essential goods and 16 per cent for services. This would subsume various indirect taxes, with the States and the Centre proposing to equally tax the common base of goods and services.
The GST requires an amendment to the constitution to allow Parliament and state assemblies to impose tax on same items, which is not the case now. At present, the Centre can impose tax on goods at the factory gate and services and states on goods at retail level. States also do not have the power to levy tax on services.
Mondal other state ministers demanded that the Centre should compensate the states till GST is finally implemented.
He also demanded to allow states to start collection of services tax on certain services which will broaden their kitty and collection machinery.