New Delhi: The proposed restructuring tax on goods and services (GST) will lead to a significant loss of income for states, which will reduce the expenditures on well -being and development, ministers and representatives of eight countries who met in national capital on Friday to discuss the proposed tax reform.
GST rates should therefore be supported by the central government’s compensation system, they said.
These states also decided to urge the GST advice to ensure that businesses to give tax advantage to consumers instead of profit.
Minister of Finance Kera KN KN Balagopal, which was part of the meeting, said Mitin: “The advantage of GST relief must be handed over to the final consumer. Proposals for rationalization of the tax include huge losses for states and should therefore be compensated.”
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Balagopal is also a member of the Ministerial Group established by the GST Council, which last week approved the proposal of the rationalization of the GST. Other states attended by Friday’s meetings are Himachal Pradesh, Jharkhand, Karnataka, Pandjáb, Tamil Nadu, Telangana and West Bengal.
Separately, in his statement, Balagopal said: “All eight states are eager to cooperate with the government of the Union and other state governments to ensure that the GST rationalization exercises result in beneficial results for all parties.”
All ministers and representatives who were present at the meeting expressed serious concerns about the substantial loss of income that may arise from the restructuring of GST, the statement said.
Compression
Proposals for restructuring of the tax rate include mainly the compression of the four -seater GST structure to the two rates mode, with most products and services moving to lower plates.
In accordance with this, many goods from cars to kitchen dishes can be cheaper. The proposal of the central government is to make a change before Deepavali to increase the demand for goods and services in the economy.
Currently, GST is used in four boards – 5%, 12%, 18%and 28%. It is planned to eliminate 12% and 28% of the board.
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“Compensation is selected for luxury objects and so -called game goods such as tobacco and caffeine drinks in 28% album. States now insist on introducing new duties that have attracted CESS to minimize their loss of income. Together with erosion of fiscal autonomy.
Eight states are expected to submit half a dozen of proposals before the GST Council, when it meets in the capital 3 and 4 September, the second person, who is also devoted to development, said.
States believe that rationalization of GST rates should be supported by a robust framework for revenue protection. “The loss of state income must be fully compensated through the GST remuneration system,” said the person who spoke of the state of anonymity.
The center should guarantee 14% of the annual income growth for the states, the person who added that compensation for any loss of income should be provided for at least five years, after which it can be reviewed based on the lift of GST.
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