Odisha demands imposition of green tax on mining

Odisha government today asked the Centre to allow mineral bearing states to impose Green Tax on mining activities, official sources said.
The issue was raised by Odisha's finance minister Prasanna Acharya during a meeting of empowered committee of state finance ministers on Goods and Service Tax (GST) at New Delhi today.
"There should be a provision in the central act for levy of green tax on production of mineral. Since mineral production pollutes environment of mineral bearing states, the money to be collected as green tax will be utilised for environment protection," Acharya was quoted as saying in an official release issued by the state government.

He pointed out that the mineral producing state which gets affected by pollution does not get any part of tax revenue under the GST.
"It is the consuming state that gets the tax revenue whereas what the people of the producing state get is, pollution," Acharya said.
Besides, state government also reiterated its demand of keeping entry tax out of the purview of GST and had categorically stated it would not roll out GST if the entry tax is not kept out of the purview of GST, he said.

"The state government earns around Rs 1,400 crore annually by way of entry tax and it is not in favour of the entry tax being subsumed under GST," Acharya stated and also demanded the Centre to compensate the states for the losses they are suffering on account of reduction in CST rates.

The Centre brought down the rate of CST from 4 to 3 per cent in April 2007, and reduced it further to 2 per cent in June 2008, in order to gradually phase out CST (which is not compatible with VAT) and introduce GST from April 2010.
The Centre had agreed to compensate the states for CST loss and did the same from 2007-08 to 2009-10. It also compensated for 2010-11, but after deducting notional gain calculated on the basis in hike in VAT rate from 4 to 5 per cent, stopped it in 2011-12, Acharya pointed out.