Amid chorus for inclusion of petrol and diesel prices under the Goods and Services Tax (GST), the Maha Vikas Aghadi government on the eve of the GST Council meeting on Thursday said it should not be done by curtailing or encroaching on the state government’s right to recover its taxes. Deputy Chief Minister and state finance minister Ajit Pawar on Thursday said the state government was against any move to encroach upon the state's right to impose taxes and put up its argument at the GST Council meeting slated for Friday.
He said, "We have to see what stand the Centre takes on the demand of bringing the fuel prices under GST. We will take our stand when the issue is brought before us.” Pawar said GST continues to be the major source of revenue for Maharashtra and the state’s rights to levy taxes should not be curtailed or encroached. “Let Centre do its job but at the same time states be allowed to function as decided at the time of shifting to the GST regime,” he said.
Pawar said GST is a major source of state’s revenue, followed by stamp duty and registration charges and excise duty. Against the budget estimate of Rs 1,07,146 crore, Maharashtra mobilised state
GST of Rs 88,000 crore in 2020-21. The decline was due to the lockdown and the economic downturn. The state had estimated the collection of Rs 40,000 crore from the sales tax/VAT (imposed on petrol and fuel), but mobilised Rs 34,000 crore in the last fiscal.
Pawar in the annual budget for 2021-22 has estimated state GST collection of Rs 1,17,807 crore and sales tax/VAT worth Rs 44,000 crore amid revival in the economic activities after the relaxation in pandemic restrictions. Maharashtra levies a 25% VAT on petrol and 21 % VAT on diesel, including an extra cess of Rs 10 per litre on petrol and Rs 3 per litre on diesel.
Pawar claimed that the Centre owes over Rs 30,000 crore to Maharashtra towards GST compensation. "Aim of GST was One Nation One Tax. Some of the commitments of the GST council are still not fulfilled. It must be fulfilled on priority," he said.
The state government in its presentation to the NITI Aayog on Tuesday said after 2021-22, there will be no compensation to state governments, which will result in about Rs 50,000 crore of additional revenue deficit for Maharashtra. Pawar said he had requested to hold the GST Council meeting in Delhi, but it is taking place at Lucknow.
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