GST won’t hamper states’ fiscal autonomy: Finance secretary

June 28th, 2011 - 10:25 pm ICT by IANS  

Kolkata, June 28 (IANS) The introduction of Goods and Services Tax (GST) will not hamper fiscal autonomy of the states, union Finance Secretary Sunil Mitra said Tuesday.

Mitra’s comments came in the context of fears expressed by several states that introduction of the GST would severely affect their fiscal autonomy.

“Introduction of GST will benefit both the centre and states as it will widen the tax base,” Mitra said during a panel discussion on states’ fiscal autonomy and the GST.

“With the introduction of GST, states will be able to get a share of service tax. Now the states are not getting the tax base of the centre and the centre is not getting the tax base of the states,” he said.

There should be no fear that states would lose their fiscal autonomy after the introduction of GST, he assured.

“GST will do away with the distortion of the present tax regime. It will make Indian manufacturing industry more competitive,” he said.

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