Wants a year’s time, suitable compensation
Haryana, which became the poineer state in launching VAT (value added tax) in the country, needs more time to prepare itself for the proposed Goods and Services Tax (GST).
In a press communication released in Chandigarh, the authorities said the state finance minister had urged the central government to defer introduction of GST by one year, compensate the state for the loss of revenue of Rs 600 crore on account of the purchase tax levied on food grains like wheat and paddy, and make a leeway for Haryana for levy of VAT on agricultural inputs like fertilisers and pesticides.
Haryana Finance Minister Ajay Singh Yadav pointed out at the meeting of state finance ministers chaired by Union Finance Minister Pranab Mukherjee in New Delhi on Tuesday that a perfect IT system and complete computerisation were necessary for switching over to GST.
Yadav said Haryana earned about Rs 600 crore per annum from the purchase tax levied on food grains, which it would lose after introduction of GST, as a consensus had been reached among the states to exempt food grains from GST. “Either the purchase tax on food grains be not subsumed in GST, or some suitable mechanism should be provided to compensate the state,” he suggested.
Pressing home the point, Yadav said Haryana made phenomenal contribution to the Central grain bowl and, for that purpose, incurred huge expenditure in the shape of subsidy on seeds, pesticides, fertilisers, free power supply to the farmers and a comprehensive network of irrigation facility.
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“The state expects to be compensated in lieu waiving of tax on the food grains,” the finance minister said.
The Empowered Committee of Finance Ministers, he pointed out, had, in principle, agreed to uphold the special needs of each state as was done in the case of VAT. The exempted list under VAT regime might be adopted, he said adding that leeway should be provided to the state in regard to the levy of VAT on agricultural inputs like fertilisers, and pesticides.