Bhubaneswar, Aug. 31: The Odisha government will ratify the GST Constitutional Amendment Bill passed by the Parliament in the state legislative assembly tomorrow, although it still has reservations about the legislation.

Aware that Odisha is going to lose sizeable revenue by abolishing the Central Sales Tax (CST) as proposed in the Bill, chief minister Naveen Patnaik today wrote to the Prime Minister demanding that at least 60 per cent of the proceeds of the cess on coal be shared with coal-bearing states through an appropriate mechanism.

"It is learnt that proceeds from the 'clean environment cess' on coal are deposited in the National Clean Energy Fund, which is earmarked for development of renewable energy in the country. As the cess is collected from the coal-bearing states, these states have legitimate expectations of getting a share from the funds collected on this account," Naveen said.

The Government of India is likely to get Rs 6,400 crore from about 160 million tonnes of coal to be produced in the country during 2016-17.

Stating that coal-bearing states bear the adverse effects of coal mining such as displacement, environment pollution, reduction in forest areas and strain on infrastructure and water resources, Naveen said: "Renewable projects in the coal-bearing states should be funded from the National Clean Energy Fund."

On the issue of GST, finance minister Pradeep Amat today told The Telegraph: "We should be compensated for the loss of revenue that will be incurred because of the introduction of GST. The state has already asked the Centre to compensate it for central sales tax loss. We have claimed Rs 2,755.36 crore towards CST compensation for the loss on account of the phase-wise abolition of the tax. We are hopeful that we will get the money."

Odisha has raised the issue in the empowered committee meetings frequently, Amat said. "Under the GST, it is only the consuming state that gets the tax revenue whereas the pollution is suffered by the citizens of the producing state," he added.

Amat said that considering the adverse environmental impact, the state has proposed an additional non-rebatable cess under GST, which the state may be empowered to levy subject to the suitable framing of guidelines after consultation with the proper authority.

Odisha has also objected to the Centre's proposal to impose tax on tobacco and tobacco products. "Tobacco and tobacco products should be included in the state list and the state should be empowered to levy tax on these products," the finance minister said.

However, he admitted that implementation of the GST would provide relief to the economy, industries and agriculture as VAT, CST, entry tax and entertainment tax would be subsumed under the GST.