Chief Ministers of the Congress-ruled states on Wednesday asked the Centre to protect states against any loss of revenue from the switchover to goods and services tax (GST). “The general feeling (among the states) is that there should not be any loss (to states),” Maharashtra Chief Minister Ashok Chavan told reporters after the meeting of Congress CMs with the Union Finance Minister Pranab Mukherjee.
Mr Mukherjee’s deliberations with the CMs of Congress-ruled states comes ahead of the crucial meeting of the empowered committee of state finance ministers on July 21 to take a call on the Constitutional amendments and other key issues related to GST.
The Centre has already assured states that it will compensate them in full for any revenue loss on account of this switchover. Mr Mukherjee, who is keen to introduce Constitutional amendments required for GST rollout in the forthcoming Monsoon session of Parliament, is reaching out to states to ensure the timeline.
The GST seeks to create a pan-India market by subsuming all state taxes such as value-added tax, entertainment tax, luxury tax, purchase tax, entry tax and central taxes like excise duty, service tax, countervailing duty and special additional duty into a single tax.
A disagreement between the Centre and states has held back the rollout of GST, that is now scheduled to kick-in from April 1, 2011.
Mr Mukherjee has already met chief ministers of various states on the issue earlier to convince them to support the comprehensive reform of the country’s indirect tax structure.
“Union finance minister asked the states to come up with their suggestions. He said he would try and factor them in,” Delhi chief minister Shiela Dikshit said.
Andhra Pradesh Chief Minister K Rosaiah said: “We had some discussions … We expressed our views.”
Mr Mukherjee met the chief ministers of various states including Delhi, Andhra Pradesh, Arunachal Pradesh and Haryana, besides Maharashtra, to facilitate implementation of the GST from April 1, 2011.