Jayalalithaa writes letter to PM Modi, suggests two-tier tax machinery
Chennai: Tamil Nadu Chief Minister J Jayalalithaa has suggested to the central government to delegate the levy, collection and appropriation of tax substitutes for value added tax (VAT), central excise and service tax by the state.
She said the central government tax machinery can focus on inter-state taxation while calling for a consensus on key and contentious issues like dual rate bonds, taxation threshold and others and setting up of independent compensation mechanism.
In a letter to Prime Minister Narendra Modi on August 17, the text of which was released to the media here on Monday, Jayalalithaa said assesses of VAT were apprehensive that they would now be subjected to two sets of taxation authorities.
She said the problem could be overcome if a simpler structure of completely delegating the levy, collection and appropriation of the substitutes for VAT, central excise and service tax within a state to the state machinery is put in place, with the central machinery focusing on inter-state taxation.
"Not only would such an arrangement be administratively much simpler, but it would also ensure that the original Constitutional design of fiscal federalism of leaving the States in complete control of at least one sizeable source of revenue is preserved," she said.
Stressing the point that manufacturing states like Tamil Nadu would stand to permanently lose substantial revenue if GST is implemented Jayalalithaa said there is no assurance of permanent compensation mechanism.
"Further, the state`s experience with the Centre`s compensation mechanism both for the introduction of VAT and the reduction of Central Sales Tax has been far from satisfactory and does not inspire confidence that a fair, hassle-free and workable compensation mechanism can be devised and implemented," she said.
"Hence, I reiterate my earlier suggestion that the amendment bill should provide for an independent compensation mechanism in this regard," Jayalalithaa said.
Jayalalithaa expressed happiness that some of the concerns raised earlier on the GST has been addressed in the revised draft constitutional amendment bill on GST.
"However, a number of concerns still remain. Foremost amongst these is the issue of fiscal autonomy. The proposed GST Council with the functions assigned to it will override the supremacy of the Legislature - both at the Centre and in the States in taxation matters. This is unacceptable to Tamil Nadu," she said.
More from India
More from World
More from Sports
More from Entertaiment
- 11-year old Odisha boy to get football training at Bayern Munich in Germany
- China warns India against deploying BrahMos cruise missile in Arunachal Pradesh
- One killed in TV channel office attack in Karachi
- Gujarat: Journalist working for local daily found dead in his Junagadh office
- Watch: How floods throw normal life out of gear across country
- Know what Ranveer Singh has to say about Akshay Kumar
- A love story for Akshay Kumar in toilet? Details inside
- Wondering if Ranveer Singh is on board Deepika Padukone’s ‘Padmavati’? Details inside
- Saif Ali Khan finds Kareena Kapoor very sexy in 'Yeh Mera Dil' song
- Donald Trump demands special prosecutor to probe Hillary Clinton allegations