State Presses for Green Cess on Sale of Minerals

Since Odisha is a mineral-rich State, a major share of minerals are sold to other States

Published: 23rd April 2015 06:03 AM  |   Last Updated: 23rd April 2015 06:03 AM   |  A+A-

BHUBANESWAR:The State Government on Wednesday reiterated its demand for imposition of a green cess on the sale of minerals.

 “Taking into consideration the adverse environmental impact on the State, I propose levy of an additional non-rebatable cess under GST (Goods and Services Tax), which the State may be empowered to levy subject to suitable framing of guidelines after consultation in the proposed GST Council,” Finance Minister Pradip Amat told the empowered committee of State finance ministers in New Delhi.

 The State Government had raised the issue at the last meeting of the empowered committee of State finance ministers on the rollout of the proposed GST. However, this was opposed by several State finance ministers from consuming States.

 Since Odisha is a mineral-rich State, a major share of minerals are either sold to other States or used in production of goods which are sold to other States. Under GST, the destination principle applies and the mineral producing-State where pollution might be localised does not get any part of the revenue. It is only the consuming State that gets the tax revenue whereas the pollution is suffered by the citizens of the producing State.

 Amat also raised the issue of compensation for CST (central sales tax) loss.

 Stating that the State has claimed Rs 4,720.21 crore as compensation towards CST reduction from 2007-08 to 2013-14, Amat said it has received only Rs 1,464.83 crore. He urged the Centre to release the balance Rs  3,255.38 crore as compensation towards CST loss.  Non-release of compensation on account of loss towards CST reduction has caused trust deficit between Centre and States, he said and asked the Centre to compensate for the State’s loss before implementation of GST.

 There should be a new entry in the Seventh Schedule to the Constitution, State List as 54 for entry of tobacco and tobacco-related products and the States should be allowed to levy tax on the use of these products to discourage the people from using them, Amat said.

 He suggested that the voting rights of the State should be three-fourths as against proposed two-thirds in the draft GST Bill and the Centre’s rights should be one-fourth for taking a decision in the GST council.

 The new voting pattern proposed in the draft Bill where the Centre will get a one-third share in voting rights will mean no decision could be taken without its concurrence.

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