Odisha welcomes GST and zero tax rate on common food items

The Odisha government has welcomed the proposal of zero tax rate on common food items while it has opposed the Clean Environment cess on coal.

GST council has agreed on rate structure as 0%, 5%, 12%, 18% and 28%. Having a slab rate structure in GST is a departure from popular international practice of having one rate of tax for all goods and services.

Council has not announced schedule of goods and services under each slab rate.

Reacting to the GST structure Chief Minister Naveen Patnaik said, “In the interest of the common man, the State Government has always been pursuing no tax or lowest possible tax policy on daily consumable goods. Therefore, we welcome the zero tax rate on common food items and reduction in tax rate from 6% to 5% by the GST Council, as demanded by the state government.”

The state government also appreciated the decision of the GST Council to recommend compensation by Central Government to the states on implementation of GST with 14% growth on collection of tax for the base year 2015-16.

However, introduction of Cess will distort the structure, CM Patnaik said, in the context of Clean Environment Cess collection on coal for compensation to all states.

“The state government will continue to pursue the central government for enhancing royalty on coal and sharing most of the Cess collected on coal among the coal bearing states instead of the same being shared for compensating all states for introduction of GST,” the CM said.

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