State governments are not interested in imposing GST on exempt assets

NEW DELHI: The opposition, as well as the states governed by BJP, are not on board to reduce the amount of products that are exempt from GST, while some of them are open to adding high-end health and training institutes to the list of taxed items, setting the stage for a possible confrontation at a time when the collections have been silenced.

“The goods on the exempt list are items of mass consumption. No state will accept to include them, ”said the finance minister of a state ruled by BJP. west of bengal finance Minister Amit Mitra He also rejected the suggestion of the GST Council secretariat to review the list of exempt items.

“The list was prepared after long deliberations in three Council meetings and was decided on a principle basis. One has to see what the new principle is. It is not possible to collect taxes on agricultural products, ”he told TOI. However, central government officials suggest that elements such as brand rice or Atta fall under the scope of the rate, as was the case with VAT.

“There are popular rice brands, selling basmati at Rs 125 a kg, which have de-registered their brands to avoid GST. How can you allow this to prevail?” said an official. With GST collections projected to be Rs 1.5 lakh crore short of the target this year, the secretariat has dashed off a letter to the states, seeking a review of the exempted items as well as the compensation cess and tax rates.

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The movement It occurred days after a meeting with state government officials and at a time when the Center has not issued compensation of around Rs 38,000 crore for August and September, which was part of a promise to bear losses if the Tax growth was less than 14% during the first five years of GST. FM Manpreet Badal of Punjab said that compensation for October and November will also be received in a few days.

On Wednesday, the opposition ruled that the states requested FM Nirmala Sitharaman To free the funds. The FM of Delhi, Punjab, Puducherry and MP and Kerala representatives, Rajasthan , Chattisgarh and west of bengal attended the meeting. Badal said the union FM has assured the delegation about the dues being cleared.

Some of the state finance ministers met and requested that they be granted a compensation amount ... We all have a duty to safeguard the interests of the states, Sitharaman said after the meeting. Unlike a review of the list of exempt assets, states are more open to increasing the cessation of compensation in the existing set of goods and services and even adding some. However, opposition-ruled states are asking for a GST review. It is a bad design and we should carry out a comprehensive review over the next three or four months to redesign it. We can't fix the punctures, Badal said.