Finalise AIIMS location and announce in budget : Paneerselvam urges Centre

Chennai, Jan 18 : Levy of GST on the projects executed for the state government was a cause for serious concern as it amounted to fiscal transfer from the States to the Centre, besides adversely affecting the financial capacity of the State, Tamil Nadu Deputy Chief Minister O Paneerselvam said on Thursday.

Speaking at the pre-budget meeting chaired by Union Finance Minister Arun Jaitley in New Delhi, he said in a way, it was a tax on States, paid from the taxes collected from people.

''It is also adversely affecting the financial capacity of the States to execute works'', he said and urged the Union Government to exempt the work contracts executed for State Governments from the purview of GST.

Reiterating the need to include the revenue received from levy of cesses and surcharges in the divisible pool of resources to the States, he said the levy of surcharge of two percent on the super rich that replaced the wealth tax, has shifted the fiscal resources from the States to the Centre.

He also urge the Central Government to include the surcharge on the super rich and other surcharges in the divisible pool of resources to the States.