Maharashtra pitches for uniform GST threshold

Written by Sanjay Jog | Mumbai | Updated: Nov 22 2009, 04:53am hrs
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 Centres 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.

The state government observed that the introduction of GST regime would be possible from April 1, 2011, against the deadline of April 1, 2010. No deviation be permitted without approval of finance ministers council and purchase tax be subsumed, the state pitched. The official said the state government has argued that natural gas be kept off GST and exemption for goods of local importance be decided only by the FMs Council and not by states.