The Orissa government is building up a case to exclude coal from the GST list. The state government is talking to coal-bearing states like Jharkhand, Chhattisgarh, Madhya Pradesh to make a pressure group in the Empowered Committee of State Finance Ministers to demand that coal be kept out of the purview of GST.
?We are going to demand for exclusion of coal from the GST list in the next meeting on GST,” state finance minister, Prafulla Ghadei, told Fe.
Ghadei has urged chief minister Naveen Patnaik to talk to the coal-bearing states so as to lobby strongly in favour of exclusion of coal from GST list.
The Empowered Committee of State Finance Ministers is going to meet on August 18. The Union finance minister is likely to meet the state GST panel on that day to discuss the revised constitutional amendment draft for GST.
Out of the 270 billion tonne of coal reserves in India, 30% is in Jharkhand, 25% in Orissa and 20% in Chhattisgarh.
Natural gas, which was included in the VAT list, has been kept out of GST on the ground that it is used for generation of power, which is used as an input in manufacturing. Currently, natural gas attracts 12.5% VAT.
? If that is so, than coal should also be kept out of GST,” argued Ghadei. He said GST on coal would have direct effect on power cost. The Input Tax Credit (ITC) and the electricity duty would push up the power cost. He said currently 4per cent VAT is levied on coal. If it would be included in GST list, the effective rate would be 12per centas both state GST and central GST would levy 6per cent each on coal.
Ghadei said that Orissa would pitch in to demand exclusion of entry tax from the GST regime.According to him, the entry tax is being levied in lieu of octroi tax, which has been exempted from GST. He said that the state would also oppose the proposed ?Centre?s veto power? with regard to state?s right on state GST.