Patna, Sept. 20: Bihar is set to pitch for a Goods and Services Tax rate in the range of 20 to 22 per cent in the first meeting of the GST council scheduled to be held in New Delhi on September 22 and 23, a highly placed source in the state government told The Telegraph today.
"A team of senior officials is charting out the details and preparing the ground on the basis of which the state would raise this point in the GST council meeting," said the source. Commercial taxes minister Bijendra Yadav, and not finance minister Abdul Bari Siddiqui, has been nominated by the government as its representative in the council, the source added.
The GST council, having been formally notified on September 15 this year, is headed by the Union finance minister and consists of the Union minister of state for finance and state finance ministers or any other minister nominated by a state government.
The council is authorised to make recommendations on issues like GST rate; taxes, cess and surcharges levied by the Centre, states and local bodies which would be subsumed by the GST and exemptions to be made in the GST laws. For now, the Centre has set April 1, 2017, as the target date for rolling out GST in India.
Confirming his nomination to the GST council, minister Bijendra Yadav neither confirmed nor denied whether the state stood for a GST rate of 20 to 22 per cent.
"I would not comment on figures for now as details are being worked out by officials," he said.
He, however, hinted at Bihar's likely stand. "We never supported the Congress party's stand of putting a 18 per cent cap on the GST rate," Bijendra said.
The minister also hinted at mobilising support of like-minded states on the GST rate. He said there were several states which shared similar concerns as Bihar and hence Bihar would lobby with them to put forward its view strongly at the council meeting.
Bijendra said a state like Bihar which generated a major chunk of its revenue from existing value added taxes would try to push for a GST rate which could be beneficial for it.
According to official figures, Bihar generated a revenue of Rs 8,607 crore from taxes on sale, trade etc in 2014-15 against the total revenue of Rs 20,750 crore generated through its own taxes. The corresponding figures for 2015-16 stood at Rs 10,197 crore and Rs 25,655.85 crore according to revised estimates. The state budget for 2016-17 has set a target of collecting Rs 14,021 crore from taxes on sale, trade, etc against the total target revenue generation of Rs 29,730 crore through its own taxes.
Senior BJP leader Sushil Kumar Modi, who also headed the committee of state finance ministers on GST for some time in the past, refused to comment on whether Bihar's likely pitch for a higher GST rate was justified or not. "The rate would be finalised through discussions. Moreover, states don't need to worry for at least five years as there is a provision for compensation for this period in the GST Act in case any state suffers financial losses owing to implementation of GST," he said.
Economist P.P. Ghosh, however, was more forthcoming and maintained that the idea of a higher tax rate was not a good one. "Broad based low rate is always the best way if one wants to improve revenue collection," he said. "Demand for higher tax rate indicates an inefficient tax administration."
The GST became a reality on September 8 this year when President Pranab Mukherjee gave assent to the 122nd Constitution amendment bill after its passage from both Houses of Parliament and subsequent assent of 19 states.
