State wants entry tax to be kept out of GST purview

The Orissa government has stiffly opposed the move of the Empowered Group of state finance ministers on Goods and Service Tax (GST) to subsume the entry tax under the proposed GST. The state has categorically stated that it would not roll out the GST if the entry tax is not kept out of the purview of GST.

“We have voiced our strong opposition to the proposal to subsume entry tax under the proposed GST at the recent meeting of the Empowered Group of state finance ministers on GST. In the first draft of the GST, there was a proposal to subsume entry tax under GST and we had opposed it but no change was made in the second draft. Now, we have stated categorically that Orissa is not going to roll out GST if the entry tax is not kept out of its ambit,” said state finance minister, Prafulla Chandra Ghadai.

Every year, the state government earns around Rs 800 crore from entry tax and this should not be brought under GST, he said. Two rounds of meeting of the Empowered Group of state finance ministers was held in New delhi on August 18. While the first round was chaired by West Bengal finance minister Asim Dasgupta, Union finance minister Pranab Mukherjee presided over the second round. The state government has suggested that all disputes between the Centre and the states related to GST structure and compensation can be settled by the GST Council and there is no need to constitute a Dispute Settlement Authority for this purpose.

“It has been suggested that a Dispute Settlement Authority chaired by a retired judge of the Supreme Court of India needs to be created for settlement of disputes but we feel that this can be resolved by the GST Council itself. The assessment and payment of compensation for loss to the states due to the roll out of GST can be done by an independent committee consisting of members drawn from the GST council and chaired by the Union minister of state for finance,” added Ghadai.

Orissa has sought a clarification on the issue of decision making by the GST Council through consensus. “At the recent meeting on GST, it was discussed that the decision making by the GST Council. However, we have sought a clarification as to whether tis consensus means taking the consent of all the state finance ministers,” he said. According to the second draft of the GST, the GST Council chaired by the Union finance minister will take all decisions and there would be no veto power of the chairman.

The state finance ministers would be made the vice chairman of this Council on a rotation.