Punjab has reservations on proposal of seller state retaining 2% tax

New Delhi/Chandigarh, November 11, 2014: The Punjab Government today expressed its reservations on the constitutional validity of the proposal of the State of Gujarat aiming at changing the present structure of (GST) Goods& Severs Tax

Expressing apprehensions on the legality of such proposal, Parminder Singh Dhindsa, Finance Minister, Punjab participating in the Empowered Committee meeting held here today at Delhi Govt. Secretariat said that the proposal to change the present structure of the Goods & Severs Tax (GST) would go against the basic principles of GST that the tax should be destination based. Similarly the proposed flow of funds from CGST would reduce the revenue of the divisible taxes between various states. The meeting was presided over by Abdul Rahim Rather Finance Minister of J&K .

Seeking destination based tax he said that the Destination Principle would reduce imbalance in industrial development as to reduce costs of freight and industry would be established close to consumption areas. Dhindsa said that the ‘destination principle’ of the proposal would result in cost effectiveness and reduction in price so it is beneficial to the consumer and should be adopted.

The Punjab Finance Minister also demanded full exemption of the GST for states. He also underlined the need to raise the threshold limit to Rs.25 lakhs. For traders to benefit over 60 per cent traders. He also demanded that there should not be any restriction on traders having turnover below Rs. 10 lakh. It is pertinent to mention here that other states demanded thresh hold limit of Rs. 10 lakh whereas Haryana demanded threshold limit of Rs. 20 lakh.

 

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