TN assembly adopts GST Bill amid DMK MLAs' walkout

State govt has later agreed to support GST as it claimed its concerns were addressed by Central govt

Tamil Nadu Legislative Assembly has passed the Tamil Nadu Goods and Services Tax (GST) Bill, 2017, through a voice vote, while the opposition Dravida Munnetra Kazhagam (DMK) abstained from the process. The state government, which has initially raised its protest against the new tax regime, has later agreed to support the move as it claimed its concerns were addressed by the Central government.

The bill was placed on June 14, in the first day of the Assembly session, and was moved today by Minister for Commercial Taxes, K C Veeramani, who said that the new tax regime would simplify the indirect taxes.

DMK Working President M K Stalin, who is the leader of opposition in the Assembly, sought the government to consider the formation of a select committee to address various issues and the passing of the bill has to be postponed till the committee consider the matter.

However, the demand was not considered and Stalin announced that the party will be abstaining from voting. The Assembly passed the Bill with the majority following this, announced Speaker P Dhanapal.

Congress, an ally of DMK, has suggested that the GST be implemented on an experimental basis for two years and it should be considered purely as a pilot project during the period to address the possible errors.

Earlier, Tamil Nadu Finance Minister D Jayakumar said that with the GST roll-out from next month, prices of essential commodities can be reined in and the state's gross domestic product (SGDP) will grow by 1-2 per cent.

He added that rates for several items — 20 commodities — were reduced following the state government's requests to the GST Council.

Jayakumar said the GST Council had increased the turnover ceiling for traders, manufacturers and restaurants under the composition scheme from Rs 50 lakh to Rs 75 lakh with a tax rate of 1 per cent, 2 per cent and 5 per cent, respectively.

He also informed that the Centre has agreed to the demands such as keeping alcoholic beverages and petroleum products outside the purview of GST and an independent mechanism for compensation of loss under the new regime for five years through a statute. Commercial taxes on alcohol and petroleum products from a large chunk of the state's coffers.

Because of the new indirect tax regime, no tax concessions are being announced by the state government in the FY18 Budget. In this backdrop, the Budget 2017-18 pegged revenue from commercial taxes at Rs 77,234 crore against the 2016-17 revised estimates of Rs 66,522 crore.