SHILLONG: The Empowered Committee of State Finance Ministers has decided to oppose inclusion of petroleum products, alcohol and entry tax of goods in the proposed unified Goods and Service Tax (GST) regime across the country.
“We have decided to recommend the Central government to exclude petroleum products and alcohol out of the GST ambit as most of the states were opposing it,” Abdul Rahim Rather, who heads the Empowered Committee, told newsmen here on Monday after the panel’s meeting.
He said the states were opposed to including these two items under the GST regime since these are the major sources of their revenue.
“These are the major sources of income for the states and if they (petroleum and alcohol) are included in the GST, the states will stand to lose a lot,” Rather added.
The Central government in its revised draft of the constitution amendment Bill proposed that petroleum and alcohol should be brought under the ambit of the GST.
“The Empowered Committee felt that the proposed inclusion of Article 246A in the Constitution, which empowers Parliament and State legislatures to make laws on GST, was adequate,” Rather said.
The Empowered Committee also recommended that compensation should be paid to those state would lose revenue due to implementation of GST.
He said the provision of Rs 9,000 crore in the last budget signified that the compensation would be paid to states.
The two-day meeting of the GST panel was attended by the finance ministers from Gujarat, Uttar Pradesh, Bihar, Punjab, Assam, Nagaland and Tripura, besides government officials representing their respective states. Earlier inaugurating the meeting, Chief Minister Dr Mukul Sangma highlighted the responsibility that state shares with the Central Government for collection of taxes. The Chief Minister even claimed that the state has done well in the area of tax collection even though it has limited resources. “Government is ensuring that trade activities with Bangladesh continue through the border,” Dr Sangma said.