PUDUCHERRY: Even though the Constitution Amendment Bill on the proposed Goods and Service Tax has been introduced in the Lok Sabha, the Union Territory of Puducherry and several other states have chosen to convey their issues and concerns over the provisions of the Bill before the Parliamentary Standing Committee on Finance, which is studying the bill. Currently, the Centre cannot tax goods and states cannot tax services. So it will require a constitutional amendment after which the Centre will be able to tax goods and states will be able to levy tax on services.In the light of such developments, the commercial taxes department of Puducherry has convened an open house, on Friday to elicit the views of trade, industry and experts, before conveying its views to the Union government, said Commercial Tax Commissioner M Rajasekhar.The Constitution Amendment Bill for roll-out of GST was introduced in Parliament during the last Budget session and had been referred to the Standing Committee on Finance. However, there were several issues which were yet to be resolved between the Centre and the states.These included provision for states to levy cess in case of natural calamities, their autonomy in matters of taxation, concerns on powers of the proposed dispute settlement authority and concerns of state governments on loss of revenue due to reduction in the CST rates.One of the main contentious issues relates to how the Centre-State disputes would be settled. While the bill provides for a dispute settlement authority, several states want all the decisions by consensus as is done in the 27-nation European Union bloc.During the open house, Punchhi Commission report on the Centre-State relation, with particular reference to taxation would also be discussed.The scenario with regard to implementation of GST is that the industry body ASSOCHAM has already expressed that implementation of goods and services tax (GST) could boost the country’s GDP by about 2 per cent annually.However, neighbouring Tamil Nadu has expressed strong reservations on the bill as it will encroach upon the powers vested with the states, provided by the Constitution. Clarity must be given on critical issues including the tax structure, methodology of innovative way of handling interstate transactions (IGST), powers of the state in altering tax rates, in levying cess and the compensation mechanism, otherwise the enactment would not yield the desired results, the government maintained.On the other hand, Kerala felt that it would bring down the prices of essential commodities. Further, the state hoped to gain through GST as it would allow the state to tax services which is a booming sector.Puducherry also has a booming service sector and it is for experts to analyse whether Puducherry could also benefit from the implementation of GST. Too much of taxation could also kill revenue. Another factor would be liquor, Puducherry’s main revenue earner, which has been kept out of the GST and the UT administration could tax it to its advantage.Deficiency in the service delivery system of the commercial taxes department would also be taken up.
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