Amid state governments’ apprehensions over a possible move by the Centre to bring petrol and diesel under the Goods and Services Tax (GST) regime, Maharashtra Deputy Chief Minister and Finance Minister Ajit Pawar has said any attempt by the Union government to alter tax structures that adversely impact states’ revenue generation will be opposed.
“Although nobody is speaking in public, there is a serious move on part of the Centre to bring petrol and diesel under GST citing one nation, one tax regime. While the centre has the right to evolve its own rules, any policy decision that adversely affects state revenue is not acceptable. In the name of the uniform tax regime, if states’ right to taxation are curbed it will be opposed tooth and nail,” said Pawar ahead of the GST Council meeting scheduled to be held in Lucknow on Friday.
“We wanted the GST Council meeting in Delhi. It would have been more convenient. Why are they holding it in Lucknow?” We also urged them to hold the meeting through video conferencing given the Covid-19 restrictions,” he added.
On July 1, 2017, when GST was introduced amalgamating over a dozen central and state levies, five commodities namely — petrol, diesel, crude oil, natural gas ad aviation turbine fuel — were kept out of the GST ambit. The decision was carefully taken keeping in view these five products generated higher revenue on which both centre and state depended heavily.
“When GST was introduced and implemented, the Centre had assured in parliament it will not take away the state government rights. At the GST Council meeting, if any decision to curb state tax rights is taken under the uniform tax regime, the Maharashtra government will register its opposition. We are not against reforms. But any restriction in taxation should not compromise the state’s rights and revenue,” said Pawar.
Despite repeated assurances, the Centre has not given Maharashtra its dues under GST compensation, said Pawar. “Under the GST compensation, Centre owes Maharashtra Rs 30,000-32,000 crore. They have still not given us our rightful dues.”
The state had also expressed its concern with the Niti Aayog during the meeting held earlier this week in Mumbai, Pawar said.
“After GST came into effect, states’ revenue generation avenues have been limited. Apart from stamp duty registration and value added tax on petrol and diesel, there is not much scope for raising revenue. Added to this, the amount from the centre under GST compensations is still pending,” said Pawar.