Tamil Nadu urges Centre to strive for 'broad consensus' on GST

Chennai: The Tamil Nadu government has said the Centre should strive for a 'broad consensus' on many aspects related to Goods and Services Tax (GST) and address states' concerns on 'permanent revenue loss' in this regard.

This was stated in a letter to Union Finance Minister Arun Jaitley by Chief Minister J Jayalalithaa, who also wrote to her state counterparts in a bid to mobilise support on GST issues raised by her. In her September 10 letter, which was released by the state government today, Jayalalithaa recalled she had submitted a letter to him in person in June this year, highlighting some of the 'crucial' financial issues pertaining to Tamil Nadu, including the proposed GST.

Pointing out to a revised draft Constitution Amendment Bill circulated on June 20, 2014, she said that provisions relating to Declared Goods had been removed and alcoholic liquor for human consumption kept outside the GST. "It has been brought to my notice that during the recent meeting of the Empowered Committee of State Finance Ministers held on August 20, 2014, consensus was reached amongst states on some more issues. "(This is) including that the threshold limit for levy of GST on goods and services should be fixed at Rs 10 lakh; the threshold limit for compounding scheme should be fixed at Rs 50 lakh with a floor rate of tax at 1 per cent; and that the Exemption list under GST should be common for both CGST and SGST. I do hope that the Government of India would accede to all these points," she said in a letter.

States should be allowed to grant exemption on all goods of local importance without any restrictions, she said, adding they should be vested with control of dealers having a turnover up to Rs 1.5 crore both for intra-state and inter-state supply of goods and services, whereby the 'Centre can avoid expanding its administrative machinery while collecting CGST (Central GST) from such dealers.'

She disagreed with Government's proposal to bring petroleum products under GST, saying it would 'diminish' the limited revenue resource of the states. Further, the dual levy system of states' tax on petroleum products in addition to GST was not acceptable, she said.