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Odisha for compensation of CST loss and revision of coal royalty

 

BHUBANESWAR, June 29, 2016: The Odisha government on Monday demanded compensation for the loss of Central Sales Tax, which was phased out keeping in mind the implementation of the Goods and Services Tax (GST).

 

Addressing Eastern Zonal Council meeting at Ranchi, Odisha Finance Minister Pradip Amat said: “As a move towards implementation of GST, it was decided to phase out CST over a period of four years with annual reduction at the rate of 1 per cent.”

 

“The Union government had decided to compensate the State Governments towards CST loss till implementation of GST. Due to the rate reduction in CST, the State is losing heavily on this account. From 2012-13 to 2014-15, the State has claimed Rs.2,908.82 crore. We would, therefore, urge upon the Union government to fully compensate the State for the CST loss,” Mr. Amat demanded.

 

The text of his speech was released here on Monday.

 

Odisha also urged the Centre to do away with upper ceiling of professional taxes. “The State governments are empowered to levy taxes on professions, trades, callings or employments in terms of the provisions of Article-276 of the Constitution of India. However, the upper ceiling for such tax is kept at Rs.2,500 per annum,” he said.

 

The State Finance Minister pointed out: “No revision in this ceiling has been made in the last 26 years. The Centre should do away with the upper ceiling allowing the States to levy profession tax on progressive basis.”

 

Mr. Amat also raised the issue of non-revision of coal royalty. “The current rate of royalty on coal is 14 per cent ad valorem which has not been revised even after more than four years. The average realisation of royalty on coal in Odisha is only about Rs.115 per tonne,” he pointed out.

 

“On the other hand, the Central Government has levied a ‘Clean Environment Cess’ of Rs. 400 per tonne, which is almost four times of the royalty that is earned by Odisha from its coal resources. This cess is not shared with the coal-bearing States, nor do the coal-bearing States get benefits from the ‘National Clean Energy Fund’ in proportion of their contribution to the cess. Such a situation, if not corrected, will perpetuate the inequality further,” said Mr. Amat. “The Central government has also collected additional levy from the prior allocatees of Schedule–II Coal mines at the rate of Rs.295 per tonne which should be rightfully transferred to the State Governments. We request that at least 60 per cent of the amount collected by the Central Government as ‘Clean Environment Cess’ on coal be transferred to the respective coal-bearing State,” demanded the Minister.

 

 

(Source: http://www.thehindu.com/)