Telangana became the tenth state in the country to ratify the constitution amendment bill on Goods and Services Tax (GST). A special session of the Legislative Assembly and the Council was convened on Tuesday to exclusively take up the issue and both the Houses unanimously adopted a resolution ratifying the GST Bill.
Chief Minister K. Chandrasekhar Rao introduced the bill in the Assembly, after which it was unanimously passed after a brief discussion. "The GST is in line with the global trend and over 150 countries have adopted it. It is a significant step towards economic reform which will benefit both the Centre and the states. The unified taxation will lead to growth," KCR said.
The chief minister also added that there would be no financial loss to the state as the bill deals only with the commercial taxes component of VAT and that the state would continue to enjoy the taxes on petrol and excise.
"Besides, the states will be benefited by an additional revenue stream in the form of the proposed share from the Service Tax. The Service Tax is growing at 35 per cent in the state, and we will benefit from this," the CM said, adding, "It has been mentioned in the GST Bill that the Centre would compensate for the revenue losses suffered by the states within five years.Â"
"This is a good step, and the states need not be worried," he said.
KCR maintained that the states would get 50 per cent share in service tax collection which is being levied by the Centre at present.
"Because of the growing e-commerce and software industry, the service sector in Telangana is on a growth trajectory. With the state entitled to 50 per cent of service tax collected, we are going to be benefited greatly," Rao said.
The GST Bill, which has been passed by both Houses of the Parliament, needs ratification by at least half of the states in order to effect an amendment to the Constitution.