Madhya Pradesh wants coal and CBM out of ambit of GST

State cabinet has demanded to put coal and coal-bed methane out of ambit of Goods and Service Tax (GST) and has decided to oppose the revised GST Bill, particularly the provisions that empowers central government to levy taxes which comes under state domain. The state cabinet also decided to oppose tribunal under the proposed bill.

“The state cabinet is of the opinion that Central government wants to enter into state tax domain and powers to levy taxes granted by Indian Constitution. Moreover the central government has an intention to strip the state autonomy of levying tax,” said a government spokesperson.

Madhya Pradesh government has already advised to levy but it can be collected by states. The service tax can have two components Central component and state component.

“Centre wants to raise domain of GST and cover those goods which are already subject to state value added tax (VAT). And strangely Centre wants to bring services into state VAT domain,” the cabinet has observed. The Madhya Pradesh government wants service tax to be levied on supply of services and linked to state VAT through input tax rebate. “Otherwise if the Centre will impose the GST Bill in its present form all states will refuse to give input tax rebate as it comes under their domain, moreover it will trigger tax evasion incidences and frauds,” said a senior government official.

Raghavji, state finance minister has strongly opposed the Central government’s existing form of GST and has said the GST will inflate prices of essential commodities like sugar, fertilisers, milk powder, edible oil, textile, readymade garments, building material and even foodgrains.

State cabinet also decided to by power from Reliance Power Limited and Essar Power Limited 1241 MW and 150 Mw power respectively at Rs 2.45 per unit.