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A day after Union Finance Minister Arun Jaitley said the Goods and Services Tax (GST) rate would be much lower than the recommended 27 per cent, an empowered committee of state finance ministers has expressed confidence it will be able to arrive at a consensus on a rate that wouldn’t bring down their revenues.
The committee, which began a two-day meeting in Thiruvananthapuram on Thursday, said the Centre’s promise to compensate states for any revenue loss was vital.
K M Mani, chairman of the committee and finance minister in the Congress-led government in Kerala, welcomed the passage of the constitutional amendment Bill for GST by the Lok Sabha on Wednesday. He hoped the Centre would be able to get the Bill passed by the Rajya Sabha, too, at the earliest.
Mani said, “The RNR (revenue neutral rate) will be so fixed that the GST will not bring down states’ revenues.” The committee, he said, should move forward in terms of addressing concern about states’ revenues, resolve pending issues through discussions and pave the way for a smooth migration to GST.
Meanwhile, the opposition Congress in Haryana demanded the one per cent tax provided for in the constitution amendment Bill on GST cleared by the Lok Sabha be increased to two per cent. It also sought the interests of producing states be protected.
