State ratifies GST Bill

All parties back Bill in special session of the House

The TS Assembly on Tuesday ratified the Constitutional Amendment of Goods and Service Tax Bill, thus joining a clutch of states which have already approved the legislation that will pave the way for roll-out of a single and unified tax system in the country.

Thanking all parties for unanimously supporting the bill, Chief Minister K. Chandrasekhar Rao informed the House about the Centre's assurance of compensating losses to states for a period of five years.

Introducing the Bill in a special Assembly session, Mr Rao stated that 150 countries were following the GST mode of taxation already.

Despite GST coming into force, VAT on petrol and diesel as well as liquor will remain as state subjects, he said.

Elaborating, Mr Rao said that out of the `31,117 crore revenue generated from VAT in the last fiscal, nearly 50 per cent was VAT contribution from various goods while the remaining 50 per cent was revenue generated from sale of petrol, diesel and liquor. This 50 per cent share from different goods is now going into GST purview, he said.

Mr Rao said the services sector would expand with the implementation of GST and the state would benefit from this as it will have 50 per cent share in service tax. The service tax in the state is growing at 35 per cent, he added.

“At present service tax is under the Centre's purview. However, TS will benefit with GST coming into force since it is ahead in sectors like ecommerce and software exports,” Mr Rao said.

Further, the interests of the states are bound to be protected since the finance minister of each state will be a member of the GST Council to be headed by the Union finance minister, he said.

Dispelling fears of the Opposition about states losing out with implementation of GST, Mr Rao said that the NDA government's word on monetary assistance for five years can be trusted since it released `1,700 crore pending dues of CST to TS of the `10,440 crore accumulated since 2007.

All the Opposition parties, while welcoming the Bill, wanted the Centre to take steps to ensure that consumers are not burdened.

Senior Congress leader G. Chinna Reddy urged the TS government to lower VAT on petrol and diesel, but increase it on liquor to wean away youth from the habit.

G. Kishan Reddy (BJP), S. Venkata Veeraiah (TD), Sunnam Rajaiah (CPM) and Moazzam Khan (MIM) as well as Srinivas Goud, Ch. Ramesh and S. Satyanarayana (TRS) also spoke.