CEA-led panel on setting GST rate may give report in 2 weeks

Senior officials say panel will present suggestions for what is known as a revenue-neutral rate

A panel led by Chief Economic Advisor Arvind Subramanian and asked to recommend possible tax rates under the proposed national goods and service tax (GST) could give its report in two weeks.

Senior officials say the panel will present suggestions for what is known as a revenue-neutral rate (RNR), as agreeable to all stakeholders as possible, after studying different proposals and taking into account expected levels of growth of the economy, different levels of compliance and broadening of the tax base under a GST.

The likely rates would be much lower than the RNR of almost 27 per cent suggested by a sub-panel of the Empowered Committee of State Finance Ministers on the GST. The final decision would be taken by the proposed GST Council.

“The panel was originally supposed to give its report around September. There were delays because wide-ranging inputs and suggestions were required,” said an official.

Finance Minister Arun Jaitley had said earlier this year that a 27 per cent rate was too high, while his state counterparts say anything less than 25 per cent would lead to loss of revenue for them.