The Hindu Business Line : State Govts must be authorised to collect service tax: Siddaramaiah

THE Karnataka Deputy Chief Minister and Finance Minister, Mr Siddaramaiah, has said that State Governments should be given the authority to collect service tax.

Addressing the members of the Kanara Chamber of Commerce and Industry (KCCI), he said: "We can think much more progressively on tax reforms if we are authorised to collect service tax."

The State Governments are urging the Centre to amend the Constitution so that they can collect service tax also.

"We have no right to collect service tax unless the Constitution is amended in this regard," Mr Siddaramaiah said.

Currently, the State Government gets more than 60 per cent revenue from commercial tax.

On the implementation of VAT in the State, he said: "We are entering a new tax system, and some teething problems will be there during the transition period."

The Tax Department has been instructed not to harass traders, if there are some `technical problems' in the implementation of the system during the transition period.

Though a section of traders is unhappy with VAT, the Government is ready to discuss with them and solve their problems. "Honest taxpayers will not be affected by VAT," he said.

To a request on reducing tax rates on some of the commodities, he said that the State Government alone couldn't take a decision in this regard.

The Empowered Committee has to take decisions on reducing tax rates.

However, the members' requests will be taken into consideration in the meeting of the Empowered Committee, he said.

The KCCI President, Mr A. Srinivasa Rao, presided over the programme.

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