States must show restraint in levying extra taxes to GST: Jaitley

“I have personally written to every chief minister saying that till such time that the GST stabilises itself, we must not consider seriously imposing some of these taxes because they may increase the burden,” Jaitley said on Thursday in the Lok Sabha. He was replying to a discussion on the Punjab Municipal Corporation Law (Extension to Chandigarh) Amendment Bill, 2017, which was later passed by the House.

While 17 taxes and 23 different cesses either levied by the Central or state governments have been subsumed in the GST, there are some taxes which still remain outside the GST like road tax. Similarly, with respect to entertainment tax, to keep the health of the municipalities in mind, they have been given the right to levy a certain reasonable tax if they feel so. 

“Now, this is a dichotomy. But this is how the architecture has come about,” Jaitley said. He said since the state government is an elected institution, it has responsibility towards the people. “Let us not start with the presumption that when parliamentary power is given to them, the states will necessarily exercise it in an irresponsible manner.” 

“We must see what is the amount of burden we can put on the common person and at the same time the flow of resources into the municipalities also takes place. I am sure the states will keep all these considerations in mind,” he added. 

Meanwhile, in a move to boost its disinvestment programme, the Centre on Friday announced the creation of the Bharat 22 exchange traded fund (ETF) comprising 22 companies, or investments, from among central public sector undertakings, public sector banks and strategic holdings in the Specified Undertaking of UTI (SUUTI), Jaitley announced here. 

“A new ETF has been created under the name Bharat 22,” Jaitley told reporters here, adding that this was the most significant announcement so far this year on the government’s stake divestment programme. “The 22 companies, oblique investments, comprise of central public sector undertakings (CPSEs), public sector banks (PSBs) and some strategic holdings in SUUTI,” he said. The Centre has a disinvestment target of Rs 72,500 crore for the current fiscal, of which Rs 46,500 crore is planned to be raised through disinvestment.