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Centre should offset revenue loss: Yanamala
Centre Should Offset Revenue Loss: Yanamala Ramakrishnudu. Andhra Pradesh Finance Minister Yanamala Ramakrishnudu told the 14th Finance Commission that the Centre should compensate the loss arising out of implementation of General Sales Tax (GST).
- The estimated loss of revenue to AP due to implementation of GST stands at Rs 4,000 crore
- Says Agricultural products should not be exempted under GST
Hyderabad: Andhra Pradesh Finance Minister Yanamala Ramakrishnudu told the 14th Finance Commission that the Centre should compensate the loss arising out of implementation of General Sales Tax (GST). The estimated loss of revenue could be Rs 4,000 crore. Yanamala attended the meeting held by the Empowered Committee of State Finance Ministers with 14th Finance Commission at Vigyan Bhavan in New Delhi on Wednesday.
He demanded that the compensation mechanism should be such that there should be an independent body to release the compensation and it should not leave any scope for whims and fancies of the Union. If possible, it should be made part of the constitutional provisions.
He further said the agricultural products should not be exempted under GST, as the loss of revenue would be considerable. In case they are exempted, permanent production linked compensation to the State should be provided and the successive Finance Commissions should be asked to make recommendations thereof. “Unless Revenue Neutral Rate is decided, the quantum of loss of revenue cannot be determined with a degree of definiteness. However, the rough estimate of loss, assuming that the present rates of tax continues, would be around Rs 4,000 crore,” the Finance Minister told the Commission. He further demanded the petroleum products should be kept outside the GST, as the States should continue to levy taxes on them at the present rates.
As a measure of building confidence among the States in promise of the Union government to compensate GST loss, the Centre should release the amount of loss of revenue due to phasing out of CST. The compensation should be released in full for the entire period and such loss to the State of Andhra Pradesh was around Rs 7,200 crore, he pointed out. The Minister said there was need for special dispensation to AP to address several financial problems being faced after bifurcation.
