Haryana Finance Minister Captain Abhimanyu on Tuesday said that the proposed withdrawal of the one per cent levy on inter-State transactions, might not be in the interest of industrialised States. However, for wider interest of the country, the State is supporting the tax reforms.

Considering  change in taxation pattern from source-based to destination-based under GST regime, Haryana and some other industrialised States previously demanded the additional levy. The proposal was opposed by the Congress.

Attending the meeting of the Empowered Committee of State Finance Minister in Kolkata on Tuesday, Finance Minister Arun Jaitley said he was “flexible” on the proposal to do away with the levy proposal.

“We had suggested an additional tax for the manufacturing/producing States. But, we respect the consensus,” Abhimanyu told BusinessLine in an exclusive interview.

“We (Haryana) are banking on the Centre’s promise to compensate States for five years to pave way for the transition,” he said.

About the estimated revenue loss of Haryana, Abhimanyu said there was no way it could be determined immediately.

“They are changing the entire principle of taxation. There is no way to judge how much tax collection will happen. But overall, the entire tax kitty will be shared by the Centre and the States,” he said.

The way ahead

Hoping for passage of the GST Bill in the monsoon session, he said, other Central and State legislations should be in place by September-October of this year, so as to make CGST a reality by 2017.

Asked about Haryana’s preparedness to implement GST, he said: “We (Haryana) have to take up certain actions to prepare the State machinery. Hopefully we will be prepared on time.”

Related Topics
comment COMMENT NOW