The Tamil Nadu government moved a bill on GST in the Assembly today, saying the proposed legislation will "simplify and harmonise" in the state the new indirect tax regime, to be rolled out nationwide from July 1.
"The proposed legislation will simplify and harmonise indirect tax regime in the state. It is expected to reduce cost of production and inflation in the economy, thereby making the trade and industry more competitive," he said.
Veeramani moved the Bill amidst noisy scenes from DMK who tried to raise the issue of alleged horse trading of AIADMK MLAs ahead of the February 18 trust vote sought and won by Chief Minister K Palaniswami.
Veeramani said the present tax system on goods and service was facing 'certain difficulties.'
"There is cascading of taxes as taxes levied by the Central government are not available as set off against" state government taxes, he said.
Also, creation of tariff and non-tariff 'barriers' like octroi, entry tax and check posts hinder the free flow of trade throughout the country, he said.
"Besides that, the large number of taxes create high compliance cost for the taxpayers in the form of number of returns and payments," he said.
The bill "inter alia" allows, among others, the state government to levy tax on all intra-state supplies of goods or services or both, except for supply of alcoholic liquor for human consumption, at a rate to be notified, not exceeding 20 per cent as recommended by the GST Council, he said.
It will also allow the government to continue taxing petroleum products like motor spirit, high speed diesel, natural gas and Aviation Turbine Fuel (ATF) till the date on which the GST Council recommends for levying of GST on these.
It will also allow government to provide powers to officers "for inspection, search, seizure and arrest," the minister said.
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