Bihar finance minister Abdul Bari Siddiqui on Monday said the state government does not favour “dual taxation” of the Centre and state on small traders with an annual turnover of Rs 1.5 crore. “We will put our view forward at the meeting of the empowered committee of states’ finance ministers to be held in Delhi on Tuesday to discuss matters related to the proposed Goods and Services Tax (GST) regime in the country,” Siddiqui said.
“Small traders with an annual turnover of Rs 1.5 crore constitute 70% of tax payers in a consumer state like Bihar. They should be freed from dual taxation of the Centre and the respective state governments,” Siddiqui said, adding only the state government should be let free to extract taxes from them.
Since the government depends on this segment of traders to net its revenue returns, the imposition of the uniform and common GST regime would either deprive the state government of its revenue resources, or would make the traders concerned subject to “dual taxation” of both the Centre and the state government, as the state governments do not want to let go their sources of tax returns to augment their resource base.
Siddiqui said the GST regime would be new to the country, and its functioning would require “developing a sophisticated device” whose procurement and application would be an additional burden on the small traders.
“This device is not in use in the country. It has to be developed,” Siddiqui said, adding that the Centre should finance its procurement and application. Otherwise, the JD (U) and RJD are not opposed to the GST, as it would benefit Bihar, since it is a consumer state.
He said the matter was discussed in details at the two-day meeting of the empowered committee of the states’ finance ministers held in Kolkata. The respective states, including Bihar, favoured that the segment of small traders with an annual turnover of Rs 1.5 crore should not be subject to “dual taxation.”
West Bengal finance minister Amit Mitra, who is the chairman of the empowered committee, has apprised Union finance minister Arun Jaitley of the concern of the state governments on this matter, Siddiqui said, adding that as the reports indicated, Jaitley has “appreciated” their concerns, including of Bihar.
In fact, Jaitley has asked Mitra to present final picture on it by Tuesday for incorporation in the Constitution Amendment Bill on the GST that has to be tabled in the Rajya Sabha for passage.