Maharashtra, Centre butt heads over GST on territorial water

Mumbai: The Maharashtra government wants the Goods and Services Tax (GST) to be implemented from April 1, but it is entangled in a dispute with the Centre over tax collection on its territorial waters. The state government, however, has argued with the Centre that GST collection for goods like gas and petroleum sold at sea should be retained with it. If the Centre takes away the rights on the goods sold on seawater, the state would lose Rs 1,000 crore in revenue.

The Centre had recently held a meeting of all state finance ministers in Delhi to discuss the GST. In the meeting, Maharashtra, Karnataka, Tamil Nadu, Gujarat, West Bengal, Kerala and Andhra Pradesh opposed the Centre’s proposal about taking away the rights of the states to claim tax on seawater goods. The Centre has said, in the proposal, it would charge tax for transactions occurring on seawater up to 12 nautical miles from the coast. “We have opposed the Centre’s claim on GST on territorial waters. Usually, such tax is charged on petroleum products and gas. But we will lose Rs 1,000 crore in tax if the Centre claims the tax. The matter is still pending for a final decision,” an official from the state finance department said.

Asked about the matter, state finance minister Sudhir Mungantiwar said the state supports the GST. “We have demanded from the Centre the implementation of GST from April, which will make the calculation of taxes easier. We cannot have two different tax systems and cannot retain the old tax collection system. It will become very complicated,” he said.

Also, the state has been mulling announcing its budget in advance after the Centre decided to announce Union Budget a month earlier than March. “We will have to prepare lot of things if budget is to be declared in advance. Every department has been given some deadline to spend its funds and get receipts. We will have to hurry up everything,” the official added.