TN seeks states' consensus on GST amendment Bill

The Tamil Nadu government said the current proposal of the Centre to introduce a constitutional amendment Bill on Goods and Services Tax (GST) before evolving a consensus on various aspects of it was not acceptable to it.

The state has urged for a broader consensus on the critical issues of the Bill with the empowered committee before its enactment.

Addressing a meeting of the Union finance minister with the empowered committee of state finance and tax ministers, Tamil Nadu said the state had consistently opposed the idea of GST Council as it compromised the fiscal autonomy of states.

The state finance minister said that petroleum and petroleum products should be totally kept outside the purview of the GST in order to protect the fiscal capacity of the states, and an enabling provision should be made for the states to levy higher taxes on tobacco and tobacco products, similar to what had been permitted to the Centre.

"Taking into account permanent losses that would accrue to the states, a 100 per cent compensation should be provided to states for five years. Consensus should be arrived on the methodology and the period of compensation, and this should be included in the Constitutional Amendment Bill," he added.

The minister said that Tamil Nadu, which has a strong manufacturing base, stands to lose huge revenue if the GST was implemented, and has urged states should be permitted to retain a portion of four per cent of the central GST in the inter-state GST sales/transfer of goods and services.