VIJAYAWADA: Finance Minister Buggana Rajendranath has stressed the need for extending the GST compensation to States beyond 2022 to ensure the annual growth rate of 14%.Though the State’s growth rate is expected to rebound next financial year, it may not be up to the extent of 14-15%. Hence, Andhra Pradesh requires additional funds in the form of GST compensation, he said, while participating in the 45th GST Council meeting held in Lucknow on Friday, September 17, 2021.
The State’s revenue in the GST regime does not match with that of VAT era. The State recorded an average annual growth rate of 14 to 15% for three years prior to the introduction of GST in 2017. In the GST regime, the average growth rate of the State for the last four years is around 10% only necessitating provision of the GST compensation every year. Added to this, the tax revenue of the State has declined due to the Covid-19 pandemic, seriously affecting the implementation of development programmes and welfare schemes, Buggana elaborated.
With regard to subsuming petrol and diesel in the GST as per the observations of the Kerala High Court, the Finance Minister reiterated the earlier stand of Andhra Pradesh on the issue. AP along with several other States is against subsuming petrol and diesel in the GST.
During the GST Council meeting, Buggana raised several issues which impacted the revenue of Andhra Pradesh, taxation powers of the State under the federal structure and the performance of trade and industry in Covid times.On the issue of tax rate on Napa stone slabs, he said as per the existing notifications and proposals of the Fitment Committee set up by the GST Council, the rate of tax applicable to polished Napa slabs is 18%.
While pointing out that similar low-end stones produced in other States such as Kota stone in Rajasthan, he said the rate of tax applicable to polished stones is 5% only except those with mirror finish. Stating that Napa slabs are not amenable for mirror finish and the entry lacks clarity that 18% tax is applicable only to polished Napa slabs with mirror finish, he urged the GST Council to reduce the tax rate on polished Napa slabs to 5% by way of clarification.
Buggana requested the council to reduce the rate of tax on solar power plants and job work in manufacturing liquor to 5%. He underlined the need to examine whether to treat spice water on par with aerated drinks, which attract 28% GST plus 12% compensation cess. Later, Buggana met Union Finance Minister Nirmala Sitharaman.
‘Covid hit AP tax revenue’
The tax revenue of AP has declined due to Covid, seriously affecting the implementation of development schemes, said Finance Minister Buggana Rajendranath