Andhra Pradesh on Friday announced to support any decision taken by the Goods and Services Tax (GST) Council to help Kerala, which is recovering from the recent floods and torrential rains.
On the proposal of the Kerala government to levy cess on intra-state supply of goods and services in order to raise funds for rehabilitation of the affected people during recent floods, Andhra Pradesh's Minister for Finance and Planning, Commercial Taxes and Legislative Affairs, Yanamala Ramakrishnudu, said that his state would support any decision taken by the Council to help Kerala.
Ramakrishnudu, however, stated that this issue cannot be compared to sugar cess proposed in an earlier meeting of the GST Council, which was opposed by several states, including Andhra Pradesh.
According to the Andhra Pradesh government, after hearing the views of all states, the GST Council resolved to constitute a committee of finance ministers of some states which would examine the issue legally and recommend to the GST Council in this regard for final decision.
On the issue of imposing additional cess on sin goods, which includes tobacco and tobacco related products, Ramakrishnudu stated that no additional cess should be levied on tobacco and tobacco products as the tobacco farmers are already in serious difficulties in view of high tax rates.
The GST Council also analysed the revenue performance of all states under the GST and appreciated the state of Andhra Pradesh for its performance, Andhra government said in a statement. It added that the state stood first in the country among large states (excluding North Eastern States) in the current financial year in GST Collections with its collections exceeding the protected revenue by 1 per cent.
"In fact, among the large states, AP is the only state with excess revenue compared to protected revenue. In view of this, the state of Andhra Pradesh will not be paid any compensation from GST compensation fund by Government of India. The all India average revenue short fall to protected revenues came down from 16 per cent in the last year to 13 per cent in the current year. The revenue gap of Rajasthan is 12 per cent, Gujarat is 14 per cent, Madhya Pradesh is 16 per cent, Kerala is 17 per cent, Delhi is 19 per cent, Bihar is 20 per cent, Karnataka is 20 per cent, Odisha is 24 per cent and Punjab is 36 per cent," the statement added.
Apart from Ramakrishnudu, Delhi's Deputy Chief Minister Manish Sisodia and Kerala's Finance Minister Thomas Issac were also present at the event.
Earlier in the day, Finance Minister Arun Jaitley approved constitution of a 7-member Group of Ministers (GoM) to examine the cess proposal put forth by Kerala issue in depth.
Bihar Deputy Chief Minister Sushil Kumar Modi was named the Convenor of the GoM, which will comprise of the following:
-Dr. Himanta Biswa Sarma, Finance Minister, Assam;
-Dr. T.M. Thomas Isaac, Finance Minister, Kerala;
-Sudhir Mungantiwar, Finance and Excise Minister, Maharashtra;
-Sashi Bhusan Behera, Finance and Excise Minister, Odisha;
-Manpreet Singh Badal, Finance Minister, Punjab;
-Prakash Pant, Finance Minister, Uttarakhand.
The GoM has been directed to submit its report by October 31.
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