Raise additional tax to 2% and make it permanent:Cong on GST

Haryana Congress today termed the Constitutional Amendment Bill for rolling out the Goods and Services Tax, passed by the Lok Sabha yesterday, as "riddled with intrinsic flaws" saying, which, if not plugged, are bound to dent the finances and adversely affect the state's economy.
"It seeks to punish Haryana on two counts for being a producing state and for being the second largest contributor to the central grain pool in the country," Haryana Congress Legislature Party (CLP) leader Kiran Choudhry said.
In a statement here, the former Excise and Taxation Minister said that a fundamental flaw with the Bill that needed to be fixed immediately is the one per cent additional tax producing states will be allowed to impose on the goods exported.

"This provision will hurt Haryana and should be amended to raise the additional tax to two per cent. Besides, the imposition of tax should not be limited to two years only but built into the Act for ever. If not done, it will seek to disincentivize the producing states which would act as a drag on the economy," she demanded.
"GST will be levied on buyers of goods and services or where the service is consumed. It means that big consuming states such as UP, West Bengal, Kerala could get a high share of the taxes at the expense of the manufacturing states which defies logic," she said.

She said that while the four per cent purchase tax on grains, levied by Haryana will be subsumed in GST, other charges like rural development fee, market fee (mandi tax), infrastructure development tax and commission to societies and sub-agents may continue in the new regime.
"I, as Excise and Taxation Minister, kept pressing more than four years that the purchase tax on foodgrains should not be subsumed. If it has been, what inbuilt mechanism has been put in place in the measure to compensate the states for the loss, especially Haryana, which will be among the biggest sufferers? We will lose several thousand crores of rupees on this account alone," she added.