From our Special Correspondent
Daijiworld Media Network - Bangalore

Bangalore, Aug 2: Karnataka has urged the Centre to announce revenue neutral rates of goods and service tax (GST) to maintain tax buoyancy in the state.

Karnataka’s home minister Dr V S Acharya, who will be deputizing for chief minister B S Yeddyurappa at the meeting of empowered committee of state finance ministers’ on GST in Delhi on August 4 and 5, indicated that he would be presenting the state government’s stand.
   
Implementation of GST rates of 6 per cent to 8 per cent would lead to loss of revenue to the extent of Rs 5,000 crore per year to the state, he said pointing out that the state would not be able to bear such a huge financial burden.

The revenue collection in state during 2009-10 stood at Rs 36,338 crore and it has set a target to collect taxes of Rs 39,000 crore in 2010-11. The rates of value added taxes (VAT) ranged from 5 per cent to 13.5 per cent while the GST rates were 6 per cent to 8 per cent.

"The GST srates hould not disturb the current rate of tax collection in the state," Dr Acharya said.

The selected GST rate should not compromise ability of states like Karnataka with high tax effort. The rate should be treated at the floor rate without limiting autonomy of states.

The minister, who also holds the religious endowment portfolio, said the government increased annual grants (tastik) to 3,600 temples in the state from Rs 6,000 to Rs 12,000 to enable priests meet daily pooja expenses.

The increase in the grants would cost Rs 58 crore to the state exchequer a year. Action would be taken against all those who found misuse of temple grants, Dr Acharya added.