States oppose having petro products, liquor in Goods and Services Tax

Several states have opposed inclusion of petroleum products and liquor in the proposed Goods and Services Tax (GST) regime as the move would severely affect their revenues.

This came out at the meeting of the Empowered Committee of State Finance Finance Ministers that deliberated the revised draft of the Constitutional Amendment Bill for introduction of new indirect tax regime, among other things.

Some states also expressed their reservation to inclusion of 'entry tax' in the GST fold.

In the revised draft of the Bill circulated to the states on September 18, the Centre had proposed inclusion of petroleum and liquor under GST. States are keen to retain their power to tax these items as they are major sources of revenue.

"Most of the states... have opposed bringing petroleum products and liquor in GST framework. They want to keep (the two items) out of GST," Empowered Committee Chairman and Jammu & Kashmir Finance Minister AR Rather told reporters after the meeting.

He did not provide names of states opposing the move.

Only 10-12 state Finance Ministers, he said, could present their views due to "paucity of time" and the remaining states would get chance in the next meeting scheduled in the around November 15.

"Empowered Committee has not completed its discussion on the revised Bill. We will try to conclude the discussion in the next meeting," Rather added.

When asked by when the new indirect tax regime is likely to come into force, Rather said he could give any timeline. "...for passing a Constitution Amendment Bill you need two-third majority. You know under the present circumstances to get two-third majority is a herculean task for the government."