Maharashtra pitches for uniform GST threshold

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Mumbai: Maharashtra, one of the leading states in service tax collection with Rs 20,337 crore mop-up in 2007-08, has made a strong pitch for full GST rollout rather than half-hearted efforts. The state government, which has been engaged in the formulation of the GST road map, has appealed to the Centre to address issues related to separation of services, goods, the tax threshold level, two-rate structure and dual authority for each dealer. The government also sought the Centre’s intervention to settle the contentious issue of revenue-neutral rate calculation.

These issues were brought up for discussion during a comprehensive presentation on Friday made by the state sales tax department to chief minister Ashok Chavan. A state government official said, “The Maharashtra government is of the view that instead of dual authority for each dealer, there should be a distribution between the Centre and states. A manufacturer who pays a central GST (CGST) of 12.5% would also have to pay a 12.5% state GST (SGST) under the mechanism. Also, the trader would have to bear an equal tax burden, though it may be reimbursed via input credit tax. There should, therefore, be a single rate.” The state government favours no distinction between goods and services and a common threshold.

The state government has also made a strong argument in favour of quick compensation mechanism from the Centre and to lower CGST rates. Further, there should be strong computerised clearing house mechanism under RBI and dispute settlement mechanism, the state opines.