TN State Legislative Assembly Passes GST Bill Monday June 19,2017

The TN State Legislative Assembly on Monday June 19,2017 passed the Tamil Nadu Good and Services Tax Bill, 2017, enabling the transition to the Goods and Services Tax (GST) regime.

The Bill was passed in the absence of the DMK, whose members staged a walkout from the Assembly moments before the Bill was put to a vote. Leader of the Opposition M.K. Stalin, during the discussion on the Bill, wanted it to be referred to a select committee for review before being taken up for voting. As the government did not respond favourably, members of the principal opposition party staged a walkout.

During the course of the debate, opposition parties raised a number of issues including the high tax rate on items like pens, pencils and women’s products and the cascading effect of high fuel prices on other products, among others.

DMK MLA Anitha R. Radhakrishnan noted that the Centre did not convene a meeting with traders and businessmen while coming up with the tax rates. “They are the ones who will be mainly affected because of this [transition to GST],” he said, adding that if GST was to succeed, they have to be brought on board and their opinions taken into account.

Congress MLA S. Vijayadharani pointed out that GST was first mooted during the Congress regime. “While it was being said back then that the tax ceiling would be just 15%, now, it is 28%. There is a risk of a cascading effect, coupled with the hike in petroleum prices,” she said.

‘Rightful share’

Ms. Vijayadharani wanted the State government to ensure that it gets a rightful share of compensation, as “Tamil Nadu will be one of the highest tax contributors under GST”.

She also said that products used by women, urea, furniture and grinders will be taxed higher under GST. “Also, Khadi and handlooms will now attract tax under GST. These should be totally exempted,” she said.

IUML MLA K.A.M. Muhammad Abubacker said there was a fear among the people that their expenses will go up by at least 20% due to GST.

Responding to the concerns, Finance Minister D. Jayakumar said that there was no need to worry about the implications of the GST regime, as there is always the opportunity to review it at the GST council. He claimed that the issues raised by former CM Jayalalithaa had been addressed, adding that the demand that taxation of petroleum products and liquor be left to the State had been met.