With some states levying taxes in addition to the the Goods and Services Tax (GST), Finance Minister Arun Jaitley has asked the state chief ministers to refrain from imposing such taxes till the new indirect tax stabilises.
"I have personally written to every chief minister saying that till such time that the GST stabilises itself, we must not consider seriously imposing some of these taxes because they may increase the burden, " Jaitley said on Thursday in the Lok Sabha.
He was replying to a discussion on the Punjab Municipal Corporation Law (Extension to Chandigarh) Amendment Bill, 2017, which was later passed by the House.
While 17 taxes and 23 different cesses either levied by the central government or the state governments have been subsumed in the GST, there are some taxes which still remain outside the GST like road tax.
Similarly, with regard to entertainment tax, to keep the health of the municipalities in mind, they have been given the right to levy a certain reasonable tax if they feel so.
"Now, this is a dichotomy.
But this is how the architecture has come about, " Jaitley said.
He said that since the state government is an elected institution, it has responsibility towards the people.
"Let us not start with the presumption that when parliamentary power is given to them, the states will necessarily exercise it in an irresponsible manner, " he said.
"We must see what is the amount of burden we can put on the common person and at the same time the flow of resources into the municipalities also takes place.
I am sure the states will keep all these considerations in mind, " he added.
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