State will lose Rs 6,000 cr under GST system: Acharya

At present, there are two slabs of 5 per cent and 13.5 per cent under the value added tax (VAT) system of taxation. Under the proposed GST system there will be two slabs of 6 per cent and 10 per cent. In other words, there will be steep decline in tax mobilisation severely affecting the State’s economy, Acharya told reporters in Bangalore.

Karnataka has made it clear to the Centre that the draft Constitution amendment Bill to shift over to the GST regime was not acceptable to the State in its present form. The provisions of the Bill infringed upon the financial autonomy of state governments, he said.

It is unlikely that the Centre will table the Constitution amendment Bill during the ongoing monsoon session, he said. He said the State has also rejected a proposal to merge entry tax with GST, he added.

He said the State government has also urged the Centre to raise the ceiling on professional tax from Rs 2,500 to Rs 10,000 per annum. Professional tax is levied by State governments or local bodies on professions, trades, callings and employment. The power to levy the tax flows from Article 276 of the Constitution that also caps the tax amount. The Centre will have to amend Article 276 to raise the limit.

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