States have long been opposing the inclusion of petroleum products and liquor in the proposed Goods and Services Tax (GST) regime, and on Monday they reiterated their stand on the issue during the meeting of the Empowered Committee of State Finance Ministers.
Several State Finance Ministers claimed that doing so would have an adverse effect on their revenues, as these items are a major source of revenue for them.
Some States also expressed their reservation to inclusion of ‘entry tax’ in the GST fold.
“Most of the states...Majority of the states have opposed bringing petroleum products and liquor in GST framework. They want to keep (the two items) out of GST,” Empowered Committee Chairman and Jammu & Kashmir Finance Minister A R Rather told reporters after the meeting. He, however, did not specify the States which opposed the inclusion of these items in the GST ambit.
Only 10-12 State Finance Ministers, he said, could present their views due to “paucity of time” and the remaining states would get chance in the next meeting scheduled in the around November 15.
The issue cropped during the meeting which was held to discuss the revised draft of the Constitutional Amendment Bill for introduction of the new indirect tax regime.
“The empowered committee has not completed its discussion on the revised Bill. We will try to conclude the discussion in the next meeting,” Rather added.
In the revised draft of the Bill circulated to the states on September 18, the Centre had proposed inclusion of petroleum and liquor under GST.
When asked by when the new indirect tax regime is likely to come into force, Rather said he could not give any timeline.
“For passing a Constitution Amendment Bill you need two-third majority. You know under the present circumstances to get two-third majority is a herculean task for the Government,” he said.
The revised Constitutional Amendment draft incorporates the views of the Parliamentary Standing Committee which had suggested minimum exclusion to ensure an integrated, comprehensive and seamless GST regime.
The issues of petroleum products and liquor have already been deliberated upon by a sub-committee of officials which was set up to study the recommendations of Parliamentary Standing Committee and the revised draft of the Constitutional Amendment Bill, and suggest ways for reconciling different positions.