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Maintaining that the Centre was not playing big brother role, Union Minister Nirmala Sitharaman on Saturday suggested that any state could forego its share of goods and services tax (GST) if it wanted to lessen the tax burden.
Sitharaman, Minister of State for Commerce and Industry, made this remark referring to the agitation by Tamil Nadu film industry over the high rates of tax on cinema tickets.
"In fact, they (Tamil film industry) have no issue with the GST. It is the additional 30 per cent local bodies tax levied by the state government that they are agitated about," the minister told reporters in Amaravati on Saturday.
"The Centre didn't play big brother role in fixing rates (under GST). If it (tax rate) has been agreed, it has been collectively agreed by the GST Council, a body representing 29 states and seven Union Territories and a lone member (the Centre).
"GST Council is a constitutional committee and the correct strength of it is in the states. This is a classic example for cooperative federalism," the minister pointed out.
GST rates were fixed by following the revenue-neutral philosophy, she added.
Asked why liquor and petroleum products were not brought under the ambit of GST, she said the states requested that a decision on them be deferred.
"It is on the request of the state governments that petroleum products and liquor are not yet brought under GST," she said.
Sitharaman said problems related to the implementation of GST were "largely settled" and the Centre was conducting a public interaction week across the country to enhance awareness among traders.
Replying to another question, the union minister said GST would be favourable for investments as the tax structure would be uniform across the country.
"Investors now need not worry about tax rates, say in Andhra Pradesh or Odisha. Also, they can have clear assessment of the costs (on raw materials) as there is a single tax. GST will also help exports as the logistic cost will reduce," the minister noted.
Later, she addressed traders and industry representatives to clarify doubts on GST.
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