The Tamil Nadu government said it had “consistently raised” many issues with the Centre regarding Goods and Services Tax and succeeded in getting many of them reddressed “to its satisfaction.” Commercial Taxes minister K C Veeramani recalled that former chief minister Jayalalithaa had in 2014 “cautioned that certain key issues would have to be resolved to facilitate a smooth rollout of GST.”
The issues included impact of GST on the fiscal autonomy of states and loss of revenue on account of lower taxes on declared goods, he told the state assembly. Tamil Nadu has “consistently raised” these issues in Parliament as well as in other fora and it was largely due to the concerns voiced by the state that many of the provisions of the constitutional amendment bill were suitably modified, he said.
Further, the state has voiced its concerns on many aspects during the 18 meetings of the GST Council, he said, adding “as a result, it (TN) has succeeded in getting many of the issues redressed to its satisfaction.” Issues that were redressed included providing compensation to states for loss sustained due to the implementation of GST, he said. “The provision for special treatment of Declared Goods has been removed, thereby protecting the revenue interests of the state,” he said. Subsequently, alcoholic liquor meant for human consumption has been kept out of the GST ambit even as petroleum products have also been kept outside the purview of the new tax regime, he said.
Meanwhile, Opposition Congress and the government were involved in a debate over Tamil Nadu implementing GST. When Congress Legislature Party leader K R Ramasamy wanted to know “whether Tamil Nadu was supporting or opposing GST,” Veeramani said many changes had been accommodated in GST as per the state’s insistence. He said whatever issues can be discussed in the GST Council and solutions could be arrived.
Finance Minister D Jayakumar, who intervened, said there will be a “constitutional breakdown” if a state did not accept a central law. The state has taken adequate measures to uphold its fiscal autonomy, he added.