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The finance ministry has proposed to compensate states for three years for losses they may incur on account of switching to a nationwide Goods and Services Tax (GST) regime, as against a demand for a five-year compensation.
"We have tentatively finalised the GST Draft Amendment Bill and have sent it for legislative vetting. The ministry has offered a compensation for three years to states for losses incurred on account of switching to the proposed indirect tax regime," Additional Revenue Secretary Rashmi Verma said.
The states have demanded such compensations be provided by the Centre for a period of five years under the GST regime, for which the government wants to introduce a Bill in the current session of Parliament.
