Tax-free goods for staff: Uttar Pradesh government writes to GST Council | lucknow | Hindustan Times
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Tax-free goods for staff: Uttar Pradesh government writes to GST Council

The state government has sent a proposal to the GST Council requesting it to allow tax exemptions on the goods sold to the government employees and pensioners by the welfare corporation.

lucknow Updated: Jul 14, 2017 00:00 IST
Brajendra K Parashar
The GST Council may take a call on the state government’s proposal at its next meeting.
The GST Council may take a call on the state government’s proposal at its next meeting.

The state government employees and pensioners may look forward to getting back the facility of buying tax-free goods from the stores and the family bazars run by the UP Employees’ Welfare Corporation, a government enterprise.

The state government has sent a proposal to the GST Council requesting it to allow tax exemptions on the goods sold to the government employees and pensioners by the welfare corporation.

Read more| GST impact: No tax-free goods for serving, former employees at UP govt-run stores

“We have strongly recommended to the GST council that old system of the state government staff getting tax-free goods from the UP Employees Welfare Corporation be allowed to continue under the Goods and Services Tax regime as well,” principal secretary, food and civil supply, Nivedita Shukla Verma told the HT. “We have quoted the examples of CSD canteens that have been allowed GST exemptions on goods sold to army personnel and pensioners,” she added.

The GST Council may take a call on the state government’s proposal at its next meeting. The GST Council comprising Union finance minister as its chairman, states’ finance/revenue ministers as its members take a decision on a proposal through a majority vote.

The roll out of the GST in the country from July 1 put an end to the provision that enabled the states governments to allow their depots to sell the goods to their employees and pensioners below the market rate by exempting the goods from the VAT. However, it allowed 50% tax exemption on goods sold by army canteens.

The UP Employees’ Welfare Corporation established in 1965 runs 160 depots (stores) and a few family bazars across the state to make goods of daily use available to the state government employees/pensioners and their dependents after their death at a rate below the market price since they purchased VAT-free goods from designated dealers.

Read more| GST regime:Government staff body pitches in for tax free goods

The state government’s move to send a proposal to the GST Council came after the employees protested saying that would not deprive them of cheaper goods but also put at risk the job of 850 employees that run the welfare corporation’s stores and family bazars.

Many, however, doubt that the GST Council would accept the state government’s proposal only partially. Under the GST, the CSD (Central Store Department) will pay full GST on goods to be sold to army personnel but 50 % of the tax would be refunded to them by the Centre and the concerning state. Earlier, the exemption was 100%. “The GST Council may not allow rebate to the state government staff more than what it has allowed to army men,” said sources.