Two state governments, Maharashtra and Tamil Nadu, have started imposing taxes outside the national goods and services tax (GST), something the Centre says they can do. The Centre says states may impose mandi (wholesale markets) tax and vehicle registration fee, besides raising entertainment tax beyond the GST rate.

On Tuesday, the Maharashtra cabinet decided to raise the one-time registration fee on private two-wheel and four-wheel vehicles by two percentage points, for new ones registered in the state. This is to compensate for a combined revenue loss of Rs 600-700 crore ...