After the empowered committee of state finance ministers, agreed that the states shall get full compensation for any loss of revenue in the initial five years of the GST regime, the voice of discontent has started arising and there are still some political parties who want more assurance that they do not lose their revenue power. These parties want a solution to Centre-state issues to be found outside the scope of the Bill.
CPI (M) general secretary Sitaram Yechury has said that the Bill is only meant for imposing a tax, it does not deal with Centre-state relations. So a resolution has to be found outside the Bill and the government has to come out with an assurance.
States have also voted against a GST rate cap in the Constitution. On its part, the Centre has agreed to drop the plan to have a 1% extra origin-based tax on interstate trade to help “manufacturing states” which fear loss of revenue. West Bengal finance minister and chairman of the panel Amit Mitra has also said that the state finance ministers conveyed to the Union finance minister that businesses with turnover of Rs 1.5 crore and below will be taxed only by states and not by the Centre.
While a general consensus in favour of the GST Constitutional Bill has emerged among states and the passage of the Bill in the Rajya Sabha next week still looks possible. In the Rajya Sabha, whose current strength is 244, NDA has only 72 members. For the Constitutional amendment Bill sail through the House, two-thirds of the members should vote in its favour.