Sharing of powers of direct taxation and indirect taxation is unfair: TN

The Tamil Nadu government on Friday termed the present sharing of powers of direct taxation and indirect taxation as unfair in the contest of limiting the direct powers of the States and said this has been exacerbated after the implementation of the Goods and Services Tax (GST), when even the bulk of indirect taxation powers have been curtailed.

Tamil Nadu, according to the Finance Minister P T R Palanivel Thiagarajan, is one of the major States producing handloom, powerloom textiles and hosiery goods in the country and this sector is next only to agriculture in terms of employment generation.

Speaking at the 46th meeting of the GST Council held in the national capital under the chairmanship of Union Finance Minister Nirmala Sitharaman, Thiagarajan said the hike on the fabrics including handloom manufactured from the natural fibre will dampen demand and thereby the farmers and MSMEs will be indirectly affected.

Before the introduction of GST, under the VAT regime of Tamil Nadu textiles were given full exemption throughout, and the readymade garments were subjected to tax at 5 per cent, he said.

"Hence, I request the Chairperson of the GST Council to kindly consider reversing the hike in GST. Alternatively, it may be considered that readymade garments having sale value of above Rs 3,000 or Rs 5,000 be taxed at the higher rate of 12 per cent and allow the present rate of 5 per cent on textiles below this level," Thiagarajan said.