The Tamil Nadu Goods and Services Tax
(GST) Bill will be introduced in the State Legislative Assembly for consideration and passage during the session starting from June 14, said State Finance Minister D Jayakumar. He said that the government is concerned about information technology (IT) readiness for the new tax regime in view of technical glitches and emphasised the need to address them on a war footing.
In the GST
Council meeting held on Sunday, Jayakumar thanked the Council for accepting some of the state's requests and reiterated that the other demands of the state should also be considered.
"We are happy to note that the Council has looked into our requests and agreed to tax footwear below Rs 500 at five per cent, to place palmyra jaggery in the NIL-rated category, to levy tax on textiles at a uniform lower rate of tax, to tax glass for corrective spectacles at 12 per cent, and to tax cashew nut at five per cent," he said.
"As the roll-out date nears, based on the feedback received from various stakeholders, we are most concerned about IT readiness in view of the technical glitches that are being reported. We would like to emphasise that solutions to these problems are extremely critical and have to be addressed on a war footing," he added.
The state finance minister reiterated the state's other requests: water sold in refill cans (bubble top) and small plastic pouches should be exempted or taxed at a lower rate of five per cent; curry, other spices, and mixture of spice powder, also known as masala powder, should be taxed at a lower rate of five per cent per cent; unbranded sugar confectioneries should be taxed at five per cent instead of 18 per cent; seashells, articles, and handicraft items made out of them should be NIL-rated; pickles should be taxed at a lower rate of five per cent instead of 18 per cent; electrical apparatus irrespective of capacity should be brought under 18 per cent to benefit housing and agriculture; frames and mountings for spectacles should be kept at 12 per cent instead of 18 per cent; attachments of tractors should be taxed at 12 per cent; cess should be restricted to motorcycles above 500 cc as only such bikes can be considered luxury items.
The state has also demanded that concrete blocks and bricks should be taxed at a lower rate instead of 28 per cent for the benefit of the construction industry. Similarly, fly ash bricks should also be brought down to five per cent. Also, wet grinder, air compressors and weighing machinery should be taxed at 18 per cent instead of 28 per cent, while power driven pumps should be taxed at five per cent instead of 12 per cent, the state has demanded.
The state's demands do not stop there. The Tamil Nadu government wants that the rate of tax for the supply of food and drinks in restaurants without air-conditioning should be brought down to five per cent. Similarly, a distinction should be made between AC restaurants serving liquor, which have a special licence, and other AC restaurants that do not serve liquor. Ordinary AC restaurants that do not serve liquor should be taxed at 12 per cent instead of 18 per cent. Hand-made jewellery made by goldsmiths from the economically weaker sections should be exempted or taxed at a nominal rate.
Films made in the local language of the state should be subject to a lower rate of tax and handloom textiles should be NIL-rated. Beedi should be taxed at a lower rate. Fishnet and fishnet twine should be NIL-rated for the benefit of fisherfolk. Unbranded biscuits manufactured by micro, small and medium enterprises should be kept under the lower tax bracket.
Speaking about the representation from the film industry, Jayakumar said, "In as much as the Constitution allows local bodies to tax entertainment, the levy of GST
would amount to double taxation. Even if we concede that there is a power to levy GST, we feel the double levy would impose a very heavy burden on the common public. We would, therefore, urge that levy of GST
on entertainment sector should be kept at 12 per cent so that the local bodies could also levy their own tax."
"Regarding the fireworks industry, which is largely located in Tamil Nadu, a majority of these units are labour-intensive and are at present out of the purview of central excise. Hence, a uniform levy of 28 per cent may harm this sector and would also pave the way for the market being flooded with imported fireworks," the minister said. Instead, he suggested that the rate of tax on fireworks should be reduced.