Chennai:State Finance and Environment and Climate Change Minister, Thangam Thenarasu, demanded the protection of revenue flow to the States after the Goods and Services Tax (GST) rates were rationalized and the compensatory cess was phased out under the proposed new tax regime.
At the meeting of the Group of Ministers on Life and Health Insurance Services and the Group of Ministers on restructuring Compensation Cess in New Delhi on Wednesday, the Minister, welcoming the move to rationalize GST, wanted the protection of revenue accruable to the States, particularly in the social welfare sector.
Many states, including Tamil Nadu, were implementing major infrastructure projects and social welfare schemes to achieve full human potential by investing in health and education, he pointed out to the need for reducing potential revenue loss to the States due to GST rationalization initiative and phasing out of compensatory cess.
The other demands were the extending compensatory cess, introduction of an alternative system to protect the state’s revenue, the handing over of the compensatory cess fully to the states for a period of 4 to 6 years and raising the net borrowing ceiling to 4% of the GDP without any conditions.
DC Correspondent
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