State taxes not in GST ambit; industry sore over decision

Shimla, 1 July: Notwithstanding introduction of the GST-based uniform tax structure, the state’s industry will continue to pay several state-level taxes like Certain Goods Carried by Road (CGCR) and Additional Goods Tax (AGT) as they have not been subsumed in the GST.

The GST will replace taxes like VAT, Central sales tax, luxury tax, entertainment tax, etc, which have been subsumed in the new tax. Other taxes like passenger goods tax, excise and taxes of petroleum products have been excluded from the GST. These taxes were specific to Himachal and were fetching high revenue.

Since the Union Government will not compensate for the loss of revenue incurred by doing away with state specific taxes like CGCR and AGT, the industry will continue to pay them. Figures secured from the Excise and Taxation Department revealed that the CGCR tax alone fetched annual revenue of Rs 207 crore while various state-level taxes contributed to almost Rs 500 crore to the state exchequer.

The industry was disheartened with the state government failing to do away with these taxes as they were transport-related levies which were charged on bulk items like steel, cement, mineral water, plastic goods, sand etc.

Arun Rawat, former chairman, CII, Himachal, said holding on to the state specific taxes would not augur well for the industry as they were entering the uniform tax regime where similar taxes would be levied all across the country and added that the industry hoped that these taxes would be done away with gradually. Additional Excise and Taxation Commissioner KK Sharma said since the Union Government was not compensating for the loss of revenue incurred on account of state-level levies, they had opted to continue with these taxes initially.

He said though the state would be compensated for the first five years for loss of taxes by the Union Government, the revenue incurred by state-level taxes was part of this compensation. With little staff enhancement vis-à-vis increasing workload after introduction of the GST, officials of the Excise and Taxation Department were demanding additional staff.

Som Dutt Sharma, president, HP Excise and Taxation Officers Association, said the state government should consider merging their department with the Finance Department and staff strength should be enhanced vis-à-vis the increasing workload. He said the Central Excise Department had enhanced their staff 2.5 times for smooth operations of the GST. He said officials should be granted one step-up promotion even if it was done without any financial implication for effective GST operations.

Source Tribune India

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