Compensate states before enacting GST: Chandumajra to Centre

  • HT Correspondent, Hindustan Times, Chandigarh
  • Updated: May 06, 2015 22:02 IST

Shiromani Akali Dal (SAD) MP Prem Singh Chandumajra on Wednesday called upon the Centre to compensate the states for the loss and remove their apprehensions before implementing the Goods and Services Tax (GST) system.

Participating in the discussion on the GST bill in the Lok Sabha, Chandumajra said the Centre must undertake to compensate the states for the loss to be suffered under this uniform tax system for 15 years.

Terming the bill as contrary to the federal spirit of the Constitution, he felt that the GST regime would lead to more dependence of states on the Centre.

Citing specific example of Punjab, he said the revenue from tax on goods and services in the state was about Rs 7000 crore per annum including Rs 1700 crore generated from various taxes on sale of foodgrains like rural development fund, market fee and infrastructure development cess. The entry tax alone generated Rs 2500 crore. With the introduction of GST, these sources of revenue would dry up and the sufferer would be Punjab.

He demanded Punjab should be covered under the same provisions which would be applicable in this bill to the hill and north-eastern states as 4 of its 22 districts were sub-montain while 4 others were in the Indo-Pak border belt.

"Punjab was earlier discriminated against while giving concessions to the hill states and the Rs 74,000 crore loans waver for the farm sector. Punjab was allocated just Rs 154 crore from this loan waver for farmers under debt," he stated.

He however agreed the new regime would plug tax leakage but the economy of the states and loss of financial autonomy must be taken into consideration by the centre before its implementation.

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