On 1st July, the Goods and services tax came into effect which was one of the most greatest reforms so far bringing the system of ‘One nation, one tax’.
Where GST is focusing on the ‘one nation’ one nation’ regime, There are states imposing additional taxes to meet with shortfalls of GST. GST has subsumed various taxes like central excise,VAT, service tax, sales tax, etc. however, in some states powers of imposing entertainment tax is given over and above GST, additionally.
One of those states is Tamil Nadu. Tamil Nadu has decided to impose 30% entertainment tax over and above the 28% of entertainment tax(tickets- above 100 Rs) and 18%(tickets-less than 100 Rs)under GST. This was easiest way to destroy the character and whole purpose of imposing tax i.e GST. This was (additional taxation) introduced and imposed to compensate losses of the respective state.
Same way Maharashtra also imposed a one-time tax on new vehicles’ registration. An additional 2% tax on vehicles and it will differ accordingly depending on the type of the vehicles. This was a smart decision by the respective state to compensate their losses post the abolition of state-specific tax implications.
Now, because of the individual states imposing individual taxes, GST is facing the difficulties already as the whole idea of having single rate across the nation for certain category without any state-specific interventions is destroyed. Government should not allow this and ameliorate the GST agreements and structure of it in terms compensation of losses the states are facing.
Meanwhile, There have been some statements like: “The powers to impose additional tax in certain categories to states are given in constitution”