Jaya vague on NDA, poses hurdle to GST

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The Narendra Modi government faced the first major hurdle in pushing goods and services tax (GST) as Tamil Nadu chief minister J Jayalalithaa on Tuesday said that the indirect tax reform without radical changes will impinge upon fiscal autonomy and result in huge permanent revenue loss to manufacturing and net exporting states like hers.

Instead of the present GST proposal, she suggested an alternate radical approach in which the levy, collection and appropriation of the substitutes for VAT, central excise duty and service tax within a state could be delegated completely to the state machinery with the central machinery focusing on inter-state taxation.

She also wanted the Centre to reimburse Rs 7,039.956 crore as CST compensation claims of Tamil Nadu pending with Union government.

As against the compensation claim of Rs 9,676.46 crore for period from 2007-12, the centre has released only Rs 2,636 crore so far.

Tamil Nadu has been submitting claims regularly but has not received the promised compensation in full from the previous UPA government, she said.

Her arch rival DMK was UPA partner until last year.

Jayalalithaa had a 50-minute meeting with prime minister Narendra Modi at his South Block office.

She presented a 65-page memorandum, which included demands for additional allocation of resources for Tamil Nadu and expediting formation of a sub-committee for the Mullaperiyar Dam after the Supreme Court order to raise its water level to 142 feet.

Terming her meeting with Modi as ‘very useful’, Jayalalithaa also wanted the centre to withdraw the UPA government’s decision to allow 51 per cent FDI in multi-brand retail.

The Tamil Nadu chief minister had a set of other proposals as well. She demanded early clearance from the centre and its full support for phase ll of the Chennai metro rail projects estimated to cost Rs 36,100 crore, the Chennai-Bengaluru industrial corridor and six-laning the Chennai-Bengaluru express way. She also wanted the railways to take 10 mega projects in the state costing Rs 1.86 lakh crore.

Jayalalithaa further wanted a special package for the southern districts of Tamil Nadu and relaxation of minimum area of 5,000 hectares for setting up a national industrial manufacturing zone, as it was difficult to find such large stretches of land contiguously in the state.

She later met finance minister Arun Jaitley to discuss financial issues relating to the state.

But the feisty chief minister remained non-committal on joining the NDA. To a question whether AIADMK would join National Democratic Alliance, she told reporters that there is “no proposal… National Democratic Alliance has got an independent majority. For that matter the BJP itself has got an independent majority. They don't need support from outside.”

Asked if AIADMK will support the National Democratic Alliance in the Rajya Sabha, Jayalalithaa did not rule it out, saying “We will see when that situation arises.”

Her other demands included constitution of the Cauvery water management board, additional allocation of power from central generating units and a host of other developmental projects in agriculture, urban development and industrial development.

Jayalalithaa also met law minister Ravi Shankar Prasad and commerce and industry minister Nirmala Sitharaman before heading back for Chennai.


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