From Our Special Correspondent
New Delhi: Meghalaya on Wednesday reiterated its demand to exempt goods like alcohol, tobacco and petro products from the purview of the Goods and Services Tax (GST).
Meghalaya’s Minister for Taxation, Zenith Sangma, who participated in the empowered committee of group of ministers (GOM) here on Wednesday, said that the hill state has very limited resources with these goods providing maximum taxes to add to the State coffers.
Other Northeastern states are also making similar demands.
The GOM urged the Finance Commission to urge the Centre to compensate the financial loses whatever the states will incur from this GST, Zenith said.
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.
Union Finance Minister Arun Jaitley 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.
The Centre might succumb to pressure from state governments to keep value-added tax (VAT) on petroleum products and alcohol outside the purview of the good and services tax (GST) to facilitate its early rollout, which is now likely by 2016.
