Although the GST regime is intended to bring in tax reforms, experimenting a new tax system at a time when the State is slowly recovering from economic slowdown will be too risky, he said in a chat with reporters.
Karnataka would incur revenue loss to the tune of Rs 5,000 crore if GST is implemented. The proposed tax rates under GST are low compared to VAT, he argued.
“The Centre has promised to compensate the revenue loss for the initial four years (after GST comes into effect). Our concern is about its effect in the long run. The new tax regime would also pose a threat to the State’s autonomy as far as tax collection is concerned...The Centre has to clarify all our doubts, Acharya said, adding that the State will seek more time from the Centre to switch over to the new tax regime.