Close on the heels of TN CM J. Jayalalithaa’s boycott of the PM’s function in Chennai, her MPs in Lok Sabha today voted against the Constitution (95th amendment) Bill on the ground that it encroached upon the states’ right. The Bill inserts a new entry in the Union list giving the Centre power to levy taxes on services as a specific item of taxation. Although Finance Minister Jaswant Singh clarified that today’s Bill was only an ‘‘enabling amendment’’ and a Service Tax Bill giving powers to ‘‘the Union and the states to appropriate proceeds of tax on services was on the anvil,” the AIADMK contingent refused to give in. Speaking for the party, V. Saroja said the power to levy service tax should lie exclusively with states and not Centre. ‘‘Expert committees had also supported this demand,’’ she said. The Centre’s promise that the amendment would ‘‘pave the way for eventual inclusion of services within the purview of state level VAT’’ did not cut any ice with her. She insisted that it was ‘‘a body blow’’ to the right of states and all 10 AIADMK MPs voted against the Bill.
