Odisha to pitch for green cess in GST meet
Dated 8th December, 2014
The state government is set to raise the pitch for introduction of a green cess on raising of minerals and also demand compensation amounting to nearly Rs 2,700 crore towards CST (central sales tax) loss at the meeting of the empowered committee of state finance ministers on Thursday.
“We are going to reiterate the demand for a green cess on minerals raised in the state on the lines of a cess imposed by the central government on coal produced in states. Our other major contention is compensation towards CST reduction up to 2013-14,” said an official at the finance department.
The Centre has so far sanctioned only Rs 1,303.08 crore for Odisha towards loss in CST till the end of 2010-11. For 2011-12 and 2012-13, the state government’s loss has been estimated at Rs 869.58 crore and Rs 1,087.67 crore respectively. The loss for 2013-14 has been computed at Rs 870 crore.
In April 2007, the central government had cut the CST rate from four per cent to three per cent and later to two per cent in June 2008.
On the Centre’s move to dole out Rs 13,000 crore as CST compensation, the official said, “We have heard of similar assurances in the past. The Centre should actually compensate the states instead of giving lip service.”
The state government will also voice its demand for a green cess.
The Centre is levying a cess of Rs 100 a tonne on coal mines in coal bearing states and Odisha needs similar non-rebatable green cess on minerals extracted in the state.
Though Odisha is a mineral rich state, a major share of minerals are either sold for consumption in other states or used in production of goods which are sold to other states.
Under GST, the destination principle applies and the mineral producing state, where pollution may be localised, does not get any part of the revenue. It is only the consuming state that gets the tax revenue whereas the pollution is suffered by the citizens of the producing state.
(This article is published in Business Standard on 8th Dec, 2014)