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The state government hopes to get the nod of the Centre on levying a green cess on minerals produced in the state.
“The Centre has assured us that the state can impose a green cess at the rate of one per cent on minerals raised. We had recently demanded the introduction of green cess at the recent meeting of state finance ministers on roll out of Goods & Service Tax (GST),” said a senior official at the finance department.
Earlier, the empowered group of state finance ministers had turned down Odisha's demand for levy of green tax on mining in the face of opposition from consuming states.
Though Odisha is a mineral rich state, a major share of minerals are either sold for consumption in other states or used in production of goods which are sold to other states.
Under GST, the destination principle applies and the mineral producing state, where pollution may be localised, does not get any part of the revenue. It is only the consuming state that gets the tax revenue whereas the pollution is suffered by the citizens of the producing state.
“Taking into consideration the adverse environmental impact, we propose for levy of an additional non-rebatable cess under GST, which the state may be empowered to levy subject to suitable framing of guidelines after consultation in the proposed GST Council. There should be a new entry in the Seventh Schedule to the Constitution, State List as 54 B- Other Polluting Goods & Services to be notified by GST Council,” state finance minister Pradip Amat said at a recent meeting of the empowered group of finance ministers.
The Centre, however, is understood to have turned down the state's other demand for taxing tobacco and tobacco related products.
Odisha had urged the Centre to enable states to levy tax on tobacco and tobacco products by including such products in Entry 54 of the State List.
Also, the state had pressed for compensation against loss incurred due to slashing of CST (central sales tax) rate from four per cent to two per cent.
The Government of India has, so far, sanctioned only Rs 1,303.08 crore (till the end of 2010-11) against the state's demand of Rs 4,720.21 crore.
For 2011-12, 2012-13 and 2013-14, the loss accrued to the state because of cut in CST rate from four to two per cent has been computed at Rs 869.58 crore, Rs 1,087.67 crore and Rs 877.18 crore respectively.
