Thiruvananthapuram: Kerala Chief Minister Pinarayi Vijayan on Tuesday said that the State Government will not implement the five percent hike in GST for essential goods such as rice and pulse items sold in packets by small-time producers and retail traders, including Kudumbashree units.
The CM said that the State has sent a letter to the Prime Minister seeking withdrawal of the hike in GST for packed items that would lead to price rise for essential items. He claimed that his government was against all types of increase in tax that would affect the common man.
The government’s stand was that the Centre should hike tax on luxury goods instead of resorting to raising tax for essential commodities, he added.
The CM further said that such a stand was conveyed by Kerala at the meetings of the GST Council and various government committees on GST rates.
Earlier, Finance Minister KN Balagopal had told the State Assembly that the State Government would not implement the five percent hike in GST rates for essential commodities.
Kerala implements Centre’s dictum on July 18
But the Kerala Government was likely not serious about its publicised opposition to the latest round of hike in Goods and Services Tax (GST) on a few essential articles from July 18. The State implemented the latest Central government order to impose five percent GST even as the Chief Minister and Finance Minister asserted that the State would not do so.
(Under the GST regime both the Central and the State governments have to agree on combining their levies with an appropriate proportion for revenue sharing between them.)
A hike for packed items such as rice, wheat and pulses being sold through retail shops came into force on July 18. The Centre and the State will share the 5% additional revenue generated out of this tax hike.
The Central government issued a notification on 2.5% GST hike for essential goods. Had it been sincere on the non-implementation of such an increase, the Kerala Government could have issued a notification exempting the same hike that it could impose. Instead of doing it, Kerala implemented the Union government’s order in the same manner in the State from July 18.
To impress the public that the Left Democratic Front Government is against the hike in GST for essential goods a letter was sent to the Central Government, requesting its withdrawal.
(GST is a single domestic indirect tax law for the entire country. It subsumes erstwhile state taxes like VAT, octroi, luxury tax, purchase tax, and central taxes like customs duty, central excise duty and service tax.)