Telangana ratifies the GST Bill

Becomes the 10th state to endorse the GST Bill

Telangana joined the growing list of states that backed the GST Bill on Tuesday with the state legislative assembly and the legislative council unanimously ratifying the one hundred and twenty second Constitutional Amendment Bill that was passed by both the Houses of Parliament .

"Telangana has become the 10th state to endorse the GST Bill," said Chief Minister K Chandrashekar Rao while expressing his happiness over the unanimous backing by the members of all political parties to the resolution moved by him.

Making his introductory comments after tabling the bill in the assembly, Rao said that the one-nation-one-tax-system was an important part of the country's ongoing economic reforms. He said every state, including Telangana, had asked for adequate safeguards to protect their respective tax revenues in the short and medium period while the new tax regime would benefit every one in the long run.

Under the GST the states would get 50% of the service tax revenue and this would give a big boost to Telangana as the state has registered a 35% growth in service tax revenues in the recent past, Rao said.

In the meeting of the Empowered Committee of State Finance Ministers held on July 26, the Telangana government informed that it would incur a revenue loss of Rs 700 crore per annum, which it gets on sale of paddy and other food products to the Civil Supplies Corporation, Rs 500 crore per annum on sale of tobacco products and a loss of Rs 2,157 core on account of the abolition of Central Sales Tax (CST) following the GST implementation. The state had sought a mandatory provision for compensation of revenue loss on these and other fronts for a period of not less than 10 years.

On August 11 Union Finance Minister Arun Jaitley wrote a letter to Telangana chief minister requesting the latter to ensure the ratification of the bill by the state legislature. In his letter, Arun Jaitley informed that the target date for introduction of GST was set as April 1, 2017.

Telangana government has been supporting the Centre's move on the GST Bill from the beginning.

As per the provisions of Article 368 (2) of the Constitution, this Bill was required to be ratified by the legislatures of one half of the states. Sibling Andhra Pradesh state too is holding a special session of its legislative assembly on September 8 to ratify the bill.