HYDERABAD: Telangana has told the GST Council that it supports the proposal for Goods and Services Tax (GST) rate rationalisation, aimed at reducing the number of tax slabs and easing the burden on items used by the public.
Deputy Chief Minister Mallu Bhatti Vikramarka, who attended the 56th meeting of the GST Council chaired by Union Finance Minister Nirmala Sitharaman in Delhi, pointed out that states could face a fall in revenue following rationalisation.
Vikramarka, who holds the Finance portfolio, said that the additional income earned by the Union government from such levies should be shared with the states to offset losses.
He said the Union government had assured that the overall tax incidence on sin and luxury goods would remain unchanged after rationalisation.
The state’s finance minister observed that the current incidence on some of these goods is higher than the proposed 40 per cent GST slab. If existing rates are maintained, the balance levy would fall outside the GST structure and would accrue only to the Union government, he pointed out.
The meeting also discussed the final reports of the Group of Ministers (GoM) on restructuring of compensation cess, on life and health insurance, and on rate rationalisation. Telangana was part of the GoM on insurance, which has recommended exemption of tax on all individual life and health insurance policies.