‘All additional taxes may be temporary’

Rujuta Parekh
Sunday, 16 July 2017

Stating that the increase in tax was probably a knee-jerk reaction, Commissioner for CGST, Pune, Pajesh Pandey said that once GST is streamlined, the tax may be revoked. “Firstly, registration tax is a different tax and not associated with GST, so we cannot say there is duplication of tax. Secondly, it was a kind of knee-jerk reaction to the revenue losses faced by the State following the GST implementation,” he explained

Pune: The additional two per cent vehicle registration tax imposed by the State government following the roll-out of the Goods and Services Tax (GST) may be revoked once the new tax regime is streamlined.

Stating that the increase in tax was probably a knee-jerk reaction, Commissioner for CGST, Pune, Pajesh Pandey said that once GST is streamlined, the tax may be revoked. “Firstly, registration tax is a different tax and not associated with GST, so we cannot say there is duplication of tax. Secondly, it was a kind of knee-jerk reaction to the revenue losses faced by the State following the GST implementation,” he explained.

He said that once the states see that the Centre is providing full compensation of revenue to them, such additional taxes introduced by the State governments may be revoked. “It is the responsibility of the Centre to fully compensate the states for revenue losses that they incur after the abolition of other indirect taxes and implementation of GST. The Centre will completely compensate the State governments for the next five years. Till then, most of these issues will be solved,” he stated.

He added that GST has certainly had a positive impact on the country and that the Union government has earned a revenue of Rs 4,000 crore by the way of IGST in the last few days. “The government has collected Rs 4,000 crore by way of levying Integrated GST (IGST) only on imports in the last few days since the roll-out of GST,” he stated.

IGST will be levied on the inter-state supply of goods or services. For example, if a person  sends goods from Maharashtra to Karnataka, the GST rate of 18 per cent charged by the dealer will be included in IGST, the revenue of which will go to the Centre. IGST is also charged on imports. According to sources, IGST will enable inter-state traders to claim input tax credit smoothly.

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