GST Council reaches consensus on state compensation; base year to be 2015-16
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The Goods and Services Tax Council in its meeting reached at a consensus on the way the States would be compensated for any loss of revenue after implementation of the new indirect tax regime, GST from 1st of April next year.
Talking to reporters after first-day of the three-day deliberations in New Delhi yesterday, Union Finance Minister Arun Jaitley said that base year for calculating the revenue of a state would be 2015-16 and secular growth rate of 14 per cent would be taken for calculating the likely revenue of each state in the first five years of implementation of the GST. He said, states getting lower revenue than this would be compensated by the Centre.
The Minister said, the GST Council also discussed the possible Goods and Service Tax rates, including a four-slab structure with lower rates for essential items and highest band for luxury goods. Mr Jaitley said, the rate structure should be such which do not lead to further inflation and both the States and Centre have adequate funds to discharge their duties.
He said, the rate should be revenue-neutral so that there is no need to burden consumers with additional tax. Mr Jaitley said, the meeting has reached at a consensus on definition of revenue to compensate states for revenue loss due to GST implementation. #casansaar (NewsonAir)
Talking to reporters after first-day of the three-day deliberations in New Delhi yesterday, Union Finance Minister Arun Jaitley said that base year for calculating the revenue of a state would be 2015-16 and secular growth rate of 14 per cent would be taken for calculating the likely revenue of each state in the first five years of implementation of the GST. He said, states getting lower revenue than this would be compensated by the Centre.
The Minister said, the GST Council also discussed the possible Goods and Service Tax rates, including a four-slab structure with lower rates for essential items and highest band for luxury goods. Mr Jaitley said, the rate structure should be such which do not lead to further inflation and both the States and Centre have adequate funds to discharge their duties.
He said, the rate should be revenue-neutral so that there is no need to burden consumers with additional tax. Mr Jaitley said, the meeting has reached at a consensus on definition of revenue to compensate states for revenue loss due to GST implementation. #casansaar (NewsonAir)
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