On Friday, the Andhra Pradesh CM Nara Chandra Babu Naidu decided to write to the Central government seeking permission for the State Government to levy a tax on the trade in between to states. The assemblies need to pass three draft laws for the integrated GST, central GST law, and compensation law for the state government.
The finance department officials said, “The main concern of Andhra Pradesh is with some provisions of the central GST and Integrated GST, because of which we will lose income.” The AP CM decided to bring to the Centre’s attention the draft of IGST laws on the inter state sales tax.
According to the draft, the IGST rate cannot be more than 28% which is the highest tax slab agreed by the council for GST. The draft also seeks permission for the state government tax officials to have power in certain cases where they can act as administrators of the IGST Act apart from the central tax authorities. The power of taxes, as of now remain mostly with the Centre and the CM is set to seek for autonomy to states in this matter.
Another topic the CM wants to address is the territorial water jurisdiction removal that lies with the center. Other coastal states along with AP like West Bengal, Kerala and Odisha have shown their objection over the Centre’s decision to remove the power of the state in levying a tax on Value Added Tax (VAT) transactions that extend up to 12 nautical miles from the coast. The officials stated that “AP fears that even though the Centre will partially allow state governments control, a deemed provision in the legislation will ensure more autonomy for states.”
This transfer of power means a loss of Rs. 600 crores a year to the State Government. This case is pending in the SC. But the Karnataka High Court ruled the decision in favor of the states.
