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State averse to GST on petro products
Following the Union government’s indication that petroleum products will be brought under the purview of the new tax regime -GST (Goods and Services Tax) soon, the State government has prepared a report suggesting that the Centre put on hold the proposal until the financial implications on the State economy are taken into consideration.
Hyderabad: Following the Union government’s indication that petroleum products will be brought under the purview of the new tax regime -GST (Goods and Services Tax) soon, the State government has prepared a report suggesting that the Centre put on hold the proposal until the financial implications on the State economy are taken into consideration.
The report will be submitted to the Empower Committee on GST at a meeting scheduled to be held in New Delhi on December 14. State Finance Minister E Rajendar and officials of Finance and Commercial Taxes Department will attend the meeting. On the request of the Centre, the government has prepared the report in consultation with the tax experts, economists and officials.
Officials of State Finance Department told The Hans India that the report has explained in detail the problem to be faced by the State in the event of the petroleum products being brought under the purview of the GST. The government had no clue why State revenues declined and also did not have the official data to analyse the reasons behind fall in tax collections every month.
“It will take at least one year to find out the valid reasons behind the drop in the revenues in some sectors,” officials said. The new tax system would not success unless the government is clear on its revenue monthly-wise. For instance, the Centre released Rs 60 crore as compensation to the State for losing its revenue under GST in November. It was Rs 10 crore only in August, he explained.
At this juncture, the proposal to introduce GST for petroleum products would compound the financial problems the State is already facing since July this year, officials said the State would not accept the inclusion of petroleum products in the GST list as the State relied majorly on the VAT being collected from petroleum products to meet the financial needs.
