The Haryana Government on Wednesday demanded to make it mandatory for the Central Government to compensate the States for the losses in the GST (goods and services tax) regime. The State Government has also urged the Centre to increase the compensation period from five years to ten years being permanent losses to the manufacturing and surplus producing States.
Haryana Finance Minister Capt Abhimanyu, while speaking at the meeting of Empowered Committee of State Finance Ministers in New Delhi on Wednesday, also urged the Union Finance Ministry that a new entry may be included in the list II-State list in the 7th schedule to the Constitution of India which would provide taxation powers to States. This formulation would enable the foodgrain producing States to levy tax on foodgrains and to sustain their contribution to national foodgrains pool, provide adequate support to farmers and also protect their revenues on a permanent basis without distorting the GST structure, he added.
Capt Abhimanyu said that Haryana has been continuously voicing its concern over the differential treatment of tobacco and its products for imposition of tax by the Centre and the states in the GST regime. The Minister also said that the states should be authorized to levy additional tax on the supply of services in the course of inter-state trade or commerce in addition to the supply of goods.
He said that the contribution of the service sector to the economy of Haryana has increased manifold. Presently, no revenue accrues to the state from levy of service tax which falls in the domain of Centre. In the proposed GST regime, states would be enabled to levy service tax on the supply of services.