GST Impacts Fiscal Autonomy Of States Like Tamil Nadu: Jayalalithaa To PM Modi

NEW DELHI: Tamil Nadu Chief Minister J Jayalalithaa, in her first visit to Delhi since winning Assembly elections last month, met Prime Minister Narendra Modi this evening and voiced her concerns about the Goods and Services Tax or GST, which aims to bring the country under a unified tax regime.

GST Impacts Fiscal Autonomy Of States Like Tamil Nadu: Jayalalithaa To PM Modi

GST Impacts Fiscal Autonomy Of States Like Tamil Nadu

“GST impacts fiscal autonomy of states and huge permanent revenue loss is expected for a manufacturing state like Tamil Nadu,” Ms Jayalalithaa said in a memorandum which was submitted to PM Modi with 29 demands.

“Before constitutional amendment on GST is taken up, Centre should strive for a broad consensus on important issues like compensation period and methodology, revenue neutral rates, floor rates with bands, commodities to be excluded from GST, so that states concerns on loss of fiscal autonomy and permanent revenue loss are allayed,” the memorandum added.

Earlier today, Finance Minister Arun Jaitley said that the GST, which has been stalled  by a stalemate for years, has earned the support of virtually all states except Tamil Nadu.

Mr Jaitley met finance ministers of 22 states states and representatives from seven others in Kolkata today in hopes of fostering a consensus on the contentious Bill.

The proposed tax reform, India’s biggest revenue shake-up since independence in 1947, seeks to replace a slew of federal and state levies, transforming the nation into a customs union.

The Congress party, the original author of the tax reform, has said it would back the GST bill if the government agreed to cap the tax rate at 18 percent and create an independent mechanism to resolve disputes on revenue sharing between states.

The government now hopes to have the Bill, which has already been passed by the Lok Sabha,cleared by the upper house or Rajya Sabha in the monsoon session of the Parliament.

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