SHILLONG, June, 12, 2017: The Meghalaya Legislative Assembly has unanimously passed the Meghalaya Goods and Services Tax Bill, 2017 during the special session which was held here on Monday.
Replying to the debate on the bill, Minister in charge of Excise, Registration, Taxation and Stamps (ERTS), Zenith M Sangma said that even though the Centre had earlier indicated that GST will be roll out from July 1 but so far there is no official communication from the Centre in this connection.
“The date for implementation of the GST is likely to be decided during the GST Council meeting to held on June 18. But as per the constitutional obligations, the GST would have to be implemented within September 15,” Minister in charge of ERTS stated.
Meanwhile, Sangma said that consuming State like Meghalaya will stand to benefit from the implementation of this new tax regime in the country even though the big producing state will lose out marginally on revenue.
He also said that GST being a destination based consumption tax the revenue resulting from interstate transactions (IGST) will accrue to the consuming state. “Thus, the manufacturing states will be at a loss. To counter this, GST has proposed a 1% non-creditable tax over and above IGST for a limited period on all interstate transactions which will in turn be reversed to the producing state,” Minister in charge of ERTS stated.
Sangma however that the States would increase their tax collection by 14 % adding that the Centre would compensate if there is a reduction in the tax collection by the State.
“The Centre would compensate the State if there is any difference between their annual revenue. All India State revenue average will be based on the fiscal year in 2015-2016,” he said adding, “The consumer states like Meghalaya would benefit immensely through the introduction of the GST,”.
Meanwhile, he informed that the State Government has also taken a decision to include people with a turnover of over Rs 10 lakh under the tax net. “Previously, people with a turnover of Rs 1 lakh had to pay tax to the State Government. The State Government find it difficult to locate the people with a turnover of over Rs 1 lakh for levying of taxes. With the decision of the Government, the people who have been brought under the tax net have been reduced from 30,000 to around 4500,” Minister in charge of ERTS informed.
On the share of tax collection through GST between Centre and the State, Sangma informed that as far as turnover of above Rs 1.5 crore, it will be assessed in the ratio of 50:50 between the states and the Centre.
Stating that 90 percent of GST taxpayers with up to Rs 1.5 crore turnovers will be assessed by the states, and 10 percent by Centre. “Those above Rs 1.5 crore will be assessed 50:50 between Centre and the state,” he said.
Moreover, Minister in charge of ERTS informed that the four GST slabs have been set at 5%, 12%, 18% and 28% for different items or services.
Stating that with a view of keeping inflation under check, he said essential items including food, which presently constitute roughly half of the consumer inflation basket, will be taxed at zero rate.
While education, healthcare and third tier railway travel will be exempt from GST, Sangma said that goods transport and cab aggregates will attract a 5 per cent tax.
Earlier, while initiating a debate on the draft Meghalaya Goods and Services Tax Bill, 2017 brought by the State Government, UDP legislator from Shillong West, Paul Lyngdoh questioned if the State Government is prepared to implement the GST in the Stat even as he questioned if Meghalaya would stand to benefit from this new tax regime by the Centre.
He also asked if the shifting of the Central Excise, Customs and Taxation department office to Guwahati would hamper the implementation of the GST in the State.
NPP legislator, James K Sangma raised concerned over the inclusion of the broom industry under the GST tax regime.
“In the previous tax system, broom industry was exempted from the payment of tax. I would to request the State Government to urged upon the Centre to exempt from the new tax regime,” he said.
Others who participated in the debate on the GST Bill include UDP legislator Jemino Mawthoh, HSPDP legislators- KP Pangngiang Diosstarness Jyndiang- and independent MLA, Saleng A Sangma.