Modi government which has taken ‘Cess’ route to burden people through Cess like Swachch Bharat, Krishi Kalyan etc is not even sparing the state governments from their Taxes. The center is planning to impose taxes on the income earned by the state governments from Liquor business licenses. This is likely to begin from July.
For an instance, AP is getting 2500 Crore through Liquor business licenses. Center is asking the state to pay 14.5% Service Tax on this income which will come up to 300 Crore. AP government had opposed this move and asked the center for the rationale behind taxing the income of the state government.
In case, the center is not yielding, the state government is planning to limit the licenses fee and compensate the loss from Additional Excise duty. The Excise duty imposed by the state government do not come under Service Tax regime. This practise is already present in Karnataka and the state will send a team to study that.
