State GST Bill tabled in Tamil Nadu Assembly amid ruckus over cash-for-vote

The state govt said that the 90% of Tamil Nadu's 601,000 dealers have migrated to GST

Amid high drama and ruckus over a television channel's sting operation on All India Anna Dravida Munnetra Kazhagam (AIADMK) MLAs, the Tamil Nadu Goods and Services Tax (GST) Bill, 2017, was tabled in the Tamil Nadu Assembly on Wednesday, in tune with the countrywide roll-out of the new tax regime from July 1. 

The state government, which objected to GST initially, said that it is ready for the roll-out and 90 per cent of the Tamil Nadu's 601,000 dealers have migrated to the new framework.

On the first day of the 24-day Assembly session, the Dravida Munnetra Kazhagam (DMK), the main opposition, raised the issue of cash-for-vote by MLAs — allegedly exposed in a sting operation by a TV channel — during the confidence motion with respect to the Edappadi K Palaniswami-led government.

A private news channel this week has aired a sting operation showing some legislators' comments on alleged cash offerings by one faction of the party to MLAs before the confidence vote in the Assembly on February 18 that led Palaniswami-led cabinet to take charge of the state. The Cabinet was formed by taking V K Sasikala into confidence.

Assembly Speaker Dhanapal did not allow the Leader of Opposition M K Stalin to raise the issue in the house, saying that it is sub-judice and can't be discussed. The opposition members started shouting slogans inside the house, and amid the ruckus, Tamil Nadu Commercial Taxes Minister K C Veeramani tabled the bill.

The Speaker ordered the eviction of DMK MLAs, including Stalin, for disrupting the Assembly. Then DMK MLAs along with ally Congress MLAs walked out of the house. The opposition MLAs blocked the road outside the Assembly in protest, following which they were arrested.

Earlier, Tamil Nadu Finance Minister D Jayakumar said that with the GST roll-out from next month, prices of essential commodities can be reined in and the state's gross domestic product (SGDP) will grow by 1-2 per cent.

He added that rates for several items — 20 commodities — were reduced following the state government's requests to the GST Council.

Jayakumar said the GST Council had increased the turnover ceiling for traders, manufacturers and restaurants under the composition scheme from Rs 50 lakh to Rs 75 lakh with a tax rate of 1 per cent, 2 per cent and 5 per cent, respectively.

He also informed that the Centre has agreed to the demands such as keeping alcoholic beverages and petroleum products outside the purview of GST and an independent mechanism for compensation of loss under the new regime for five years through a statute. Commercial taxes on alcohol and petroleum products form a large chunk of the state's coffers.

The State will be undergoing a major change in the indirect taxation system because of the GST roll-out in the financial year (FY) 2017-2018. Knowing that the GST regime will impact resources of a manufacturing state like Tamil Nadu significantly, the Centre has agreed to compensate the loss for five years. Because of the new indirect tax regime, no tax concessions are being announced in the FY18 Budget. On this backdrop, the Budget 2017-18 pegged revenue from commercial taxes at Rs 77,234 crore against the 2016-17 revised estimates of Rs 66,522 crore.