GST, states and Sikkim

Goods and services Tax (GST) was proposed to be introduced across states in India by 1st of April 2010. It was rescheduled to be introduced by 2012 tentatively.

Special Commissioner Commercial Tax Division, Government of Sikkim HB Rai informed that there exist numerous bottle neck problems in respect to introduction of GST across nation. The problem being faced by the empowered committee which includes all the states Finance Ministers across nation are the thresh holds limits to be charged under GST, limitations, fixing of rates and many more. The consensus from the entire states is yet to be build up in respect to the introduction of the GSTy.

Since long the state government was only authorized to levy taxes on goods whereas the services taxes were levied by the central authority across nation but once the GST is introduced the levying of service tax will also be authorized to the state government. But the authorization of levying service tax to the state will only be met after amending the constitution.
 

 

The other factor that obstructs the introduction of GST is the formation of ‘Dispute Settlement Authority’.

Mr. Rai said that the aim of introducing GST is to make the rates of commodities across nation uniform. The introduction of GST will ensure the time saving factor of the tax payers as the paying of taxes will come under one roof. When enquired about the levying of Value Added Tax (VAT) in Sugar Mr. Rai informed that the meeting held under the chairmanship of the current chairman, Empowered Committee (EC) Sushil Kumar Modi on October 14 has proposed a resolution of levying VAT on Sugar but the implementation of VAT on sugar will only take place after availing total consensus from the members of ECs.

Informing about the total collection of taxes in state under different taxes levied like Environmental Cess, VAT, Sales Tax on items like Liquor, Petroleum products, Central Service Tax (CST), Profession Tax and Sikkim Transport Infrastructure Development Fund (STIDF) he said that under the financial year 2010-11 a total of 22.59% annual increment growth has been met by the division which amounted to collection of Rs. 177 crores. Adding more he mentioned that commercial tax division is the highest revenue generating department in the state too.