GST panel to discuss taxation of liquor, petro products

Centre is keen on liquor, petroleum production coming under GST but states want to retain their power to tax these products as they generate major revenue

Issues concerning taxation of liquor and petroleum products are expected to figure in the meeting of the Empowered Committee of State Finance Ministers tomorrow.

While the centre wants that liquor and petroleum products should come under the GST, the states are keen to retain their power to tax these products as they are major sources of revenue.

These issues have already been deliberated upon by a sub- committee of officials which was set up to study the recommendations of Parliamentary Standing Committee and the revised draft of the Constitutional Amendment Bill, and suggest ways for reconciling different positions.

The report of the sub-committee, which was set at the behest of Empowered Committee Chairman and Jammu & Kashmir Finance Minister A R Rather, will be placed before the Ministers for discussion.

"State Finance Ministers are meeting on Monday. They will consider the report of the sub-committee of officials," a senior Finance Ministry official said.

In the revised draft of the Constitution Amendment Bill circulated to the states last month, the Centre had proposed inclusion of petroleum and liquor under GST, a position which is not acceptable to the states.

The government's revised Constitutional Amendment draft incorporates the views of the Parliamentary Standing Committee which had suggested minimum exclusion to ensure an integrated, comprehensive and seamless GST regime.

Roll-out of GST, which will empower the Centre and States to simultaneously tax supply of goods and services, had missed several deadlines due to differences between states and the Centre over contentious issue of CST compensation and design of the GST structure.

The Constitution Amendment Bill was introduced in Parliament in 2010. The government hopes that it will be taken up for discussion in the Winter session.