GST: Guj wants 1% extra duty to continue till states want it

Gujarat government today demanded that an additional one per cent tax, over and above rates prescribed in the proposed Good and Services Tax (GST), should continue as long as states want it.
As per the GST proposal, states will be allowed to levy one per cent additional tax for initial two years.
"As we move closer towards the GST regime, finances of manufacturing and net producing states would come under strain, particularly in the initial years, till the cumulative benefits of better compliance can be realised in the form of higher revenues," Gujarat Finance Minister Saurabhbhai Patel said here at a pre-budget meeting here.

He noted that there would be permanent loss of revenue to manufacturing states due to destination principle in GST, while net consuming states would have permanent revenue gains with the introduction of GST regime.
"Therefore, we strongly urge that the measure of comfort provided to these net producing states in the form of additional tax, must be continued if not permanently, then at least until otherwise recommended by the GST Council," Patel said.
In its budget wish-list, Gujarat demanded an increase in the minimum support price (MSP) of cotton and imposition of anti-dumping duty on vitrified tiles. It also demanded that the Centre reconsider the decision to reduce the rate of duty-drawback for marine fisheries export.

"The rate of duty drawback for marine fisheries export for the current year is 3.30 per cent. This rate has been reduced to 1.40 per cent by the Director General Commerce and Foreign Trade. Such a reduction would adversely affect the marine fisheries sector," Patel said, adding that the decision should be reconsidered urgently.

Demanding imposition of anti-dumping duty on vitrified tiles, he said: "Manufacturers of vitrified tiles situated in Gujarat account for more than 80 per cent of the India's capacity. They are facing unfair competition from Chinese exporters are dumping vitrified tiles into India".
On cotton, Patel said the Centre should revisit and revise the MSP of cotton as lower support price has resulted in "considerable hardship to cotton farmers" and states has to announce relief package of an estimated Rs 1,100 crore.

Patel also sought early resolution to the issue of royalty on crude oil paid by state explorer ONGC.
"...Estimated short payment of royalty till January 2014 is Rs 10,059 crore and penalty is approximately Rs 5,000 crore as on September 30, 2014," Patel said.
Gujarat also demanded an increase in funding for quality improvements in the mid-day meal scheme, exemption of import duty for electric vehicle (EV) buses.