The Goods and Services Tax (GST) rollout, which has missed several deadlines because of lack of consensus among states over certain crucial issues on the new tax regime, may see some development with the Finance Ministry proposing to compensate states for three years for losses they may incur on account of switching to a nationwide GST regime, as against a demand for a five-year compensation by the state governments.
The present government in its bid to roll out GST from April 1, 2016 countrywide, wants to introduce the bill in the current session of the Parliament. GST Bill would be taken up by the Cabinet after Empowered Committee (of state Finance Minister) meeting on December 12.
Union Finance Minister Arun Jaitley will meet state finance ministers on December 11 to build consensus on issues related to inclusion of petroleum products, entry tax and compensation funds. States have been demanding that petroleum, alcohol and tobacco should be kept out of the purview of GST.
A sub-committee on GST has suggested that the revenue neutral rate of GST be pegged at about 27 per cent and had also suggested that states GST be kept at 13.91 per cent and Central GST at 12.77 per cent, though the states are yet to decide on it.
