States on Thursday rejected the draft Goods and Services Tax (GST) Bill, claiming that it still does not address their concerns related mainly to entry tax provisions and taxation of petroleum products. The move comes as a setback to the Centre as the NDA Government is keen to implement the new regime from April 1, 2015 onwards.
At a meeting of the Empowered Committee of State Finance Ministers, the Centre's plan to bring petroleum goods under GST regime was opposed. They also objected to the Constitutional Amendment Bill as it does not contain provisions for giving states compensation against any possible loss of revenue after GST roll-out for five years.
"There is no consensus between the Centre and states on these three things (compensation issue, petrol tax and entry tax). The Empowered Committee is not supporting the Bill without these three things," Empowered Committee Chairman Abdul Rahim Rather said after the meeting.
The Centre, he stressed, "will have to respect views of the states."
The states want that the Centre to compensate them for any loss of revenue on implementation of the GST for five years and a clause regarding the compensation be included in the Constitution Amendment Bill, Rather said.
The State Governments are also keen on keeping the entry tax and petro tax out of the ambit of the GST.
In a bid to roll out the GST, which would subsume excise and service taxes, the Centre has come out with a new Constitutional Amendment Bill.
"Government hasn't agreed to our recommendations made last time, except one recommendation. We had said that the share of Union government in GST should go to the divisible pool and should be devolved among states , that has been agreed by Centre," Rather added.
The J&K Finance Minister said that the draft of the new Constitutional Amendment Bill, which was received by the Committee earlier in the month, did not take on board the suggestions of the state Finance Ministers.