Tamil Nadu Chief Minister J.Jayalalithaa on Friday suggested to Prime Minister Narendra Modi to arrive at a broad consensus on various issues before taking up the Goods and Services Tax (GST) bill.
Jayalalithaa presented a memorandum with various demands to Modi, who went to her residence after launching the National Handloom Day and India Handloom brand here.
The meeting between Modi and Jayalalithaa lasted around 50 minutes. The chief minister also hosted lunch for Modi.
Accorinding to Jayalalithaa, the central government should strive for a broad consensus on issues like the compensation period and methodology, revenue neutral rates, floor rates with bands, commodities to be excluded from GST and clarity on dual administrative control, so that the genuine apprehensions of states regarding loss of fiscal autonomy and permanent revenue loss are allayed.
She said states are concerned about the impact the proposed GST will have on their fiscal autonomy and the huge permanent revenue loss it is likely to cause to manufacturing and net exporting states like Tamil Nadu.
Jayalalithaa also voiced her opposition to the setting up of GST Council as it impinges on the legislative sovereignty of parliament and state legislatures.
If at all a council is formed, the weightage of the vote of the central government should be reduced to one-fourth of the total votes cast and that of the states should be increased to three-fourths of the total votes cast, she said in the memorandum.
The memorandum also demanded:
Petroleum and petroleum products should be kept outside GST; Need to enable states to levey higher taxes on tobacco and tobacco products;
Independent compensation mechanism for 100 percent reimbursement of revenue losses suffered by states for not less than five years; and
Goods/services origin states may be allowed to retain four percent of the Central GST/part of the Inter-State GST that would be leviable on inter-state supply of goods/services.