The first meeting of the Group of Ministers set up for rationalising GST rates and to shore up revenue will be held soon, its chairman and Karnataka Chief Minister Basavaraj Bommai said on Friday after meeting with Union Finance Minister Nirmala Sitharaman.
"Very soon, I will call the first meeting of GoM. I met her (Finance Minister) in this backdrop," Bommai told reporters after the meeting.
The Group of Ministers (GoM) has to submit a report in the next two months, Bommai said, adding he discussed important issues related to rationalisation of Goods and Services Tax (GST) taxes and ways to increase revenue with the Union Minister.
Earlier, Bommai was to meet the finance minister late in the evening. However, the meeting was advanced.
In September, the Goods and Services Tax (GST) Council had decided to set up two Groups of Ministers (GoMs) to shore up revenues.
Bommai's seven-member group constituted by the Finance Ministry includes West Bengal Finance Minister Amit Mitra and Kerala Finance Minister K N Balagopal, as well as GST Council members from Goa, Bihar, Uttar Pradesh and Rajasthan.
Asked if the centre has released the pending GST compensation to Karnataka, the chief minister said it has been cleared till 2019-20 fiscal. For 2020-21 fiscal, the state was to get Rs 11,800 crore which is being released in phases.
For the current fiscal, the Centre has sanctioned GST compensation of Rs 18,000 crore via loan, he said, adding a higher amount was sanctioned as the state GST collection has improved when compared to the last year.
Besides GST, the chief minister also sought more support to Karnataka under programmes implemented by Nabard. "I have sought higher allocation to the state under one of Nabard's infrastructure schemes." He also requested an increase in loan amount from the current Rs 1,500 crore given by Nabard for farmers and rural development.
Bommai said the Union Minister will visit the state and attend separate programmes of Nabard and SIDBI.
Later addressing the India Today conclave, the chief minister said there has not been the erosion of fiscal autonomy due to GST implementation as criticised by the opposition parties.
The GST was passed in Parliament after more than a decade of deliberation and vetting by several committees, he added.
The whole idea of GST is to bring uniformity to the tax system. A state cannot have different taxes. People from the same country should not suffer different taxes -- this is the principle behind it, he said, adding there are mechanisms where it has been compensated to states.
Stating that there was no tax autonomy before GST implementation, he said there were taxes in different forms. For instance, excise duty and central sales tax.
"They (taxes) were in different forms. Not that there were no central taxes at all before GST. Therefore, to give political colour to every economic activity, it is not the right thing to do," he said.
On reviewing GST tax slabs, Bommai said the GST Council was set up to look into changes.
"There are regular corrections that are going to take place. These corrections will bring in a lot of changes in future also. It is there today, it will bring in the future also. That is the flexibility in GST," he added.
He also mentioned that pre-GST period there was no forum to discuss central taxes. Now, a forum has been created by the GST council where all party-led states can express what they want and there will be a conscious decision, he said.
"What best can happen to a country with so many states having a conscious decision especially on taxation matters," he added.
On imposing uniform taxes on petrol and diesel, he said that petroleum was discussed at large and ultimately it was decided that some powers should be given to states at least in a few items i.e. hydrocarbons and liquor to have finance for their own programmes and state-based needs.
"A small sales tax has been put in different states in different slabs. But there is 40 per cent devolution in petrol cess, which Centre has put. 40 per cent goes to the states. All states are unanimous that this is one avenue that we get revenue in a considered manner," he said.
States need a small window to get revenue for the implementation of their own projects, he added.
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