New Delhi, 05 February (HS). Union Finance Minister Nirmala Sitharaman said on Monday that the government cannot do anything in the matter of tax transfer to the states, it is completely based on the recommendations of the Finance Commission. He said that transfer of direct taxes to the states is done on the recommendation of the Finance Commission.
The Finance Minister said this in response to a supplementary question by Congress leader Adhir Ranjan Choudhary during the Question Hour in the Lok Sabha. Sitharaman told the House that 100 per cent of the State Goods and Services Tax (SGST) goes to the states. The government cannot do anything in the matter of tax devolution of some states, as it is entirely based on the recommendations of the Finance Commission. He said that the Center has neither any authority nor any role in this matter.
Sitharaman said that I do not have the right to change whether I like a state or not as per my wish and choice. He said that the recommendations of the Finance Commission are implemented without any fear or favour. The Finance Minister said that the tax transfer system is working properly. Answering the question of Adhir Ranjan Chaudhary, the Finance Minister said that the Commission makes its recommendations after consulting various stakeholders.
He told the House that Goods and Services Tax (GST), especially State Goods and Services Tax (SGST), is also transferred 100 percent to the states. Integrated Goods and Services Tax (IGST) is collected because it involves large inter-state payments. In fact, Adhir Ranjan Choudhary had alleged that the Central Government has done injustice in reducing tax transfers to Karnataka and other non-BJP ruled states.