In a decision that could help push the Goods and Services Tax (GST) Bill through Parliament, the Centre and states today agreed on the principle that the tax rate willbe lower than the existing level. Broad consensus emerged that the rate should not be part of the Constitutional Amendment Bill.
The wording for the five-year compensation to be paid to the states for losses incurred due to GST has been also been worked out, West Bengal Finance Minister Amit Mitra told reporters after a meeting of the Empowered Committee of State Finance Ministers, chaired by Finance Minister Arun Jaitley.
“Asfar as the GST rate is concerned, a broad consensus has been laid out, where thecommon man does not face the current high taxes, and states do not lose out onrevenue,” said Mitra, who is also the Chairman of Empowered Committee of StateFinance Ministers.
He added that businesses earning less than Rs 1.5 crore turnover will be under state control, and those above that will be jointly controlled by states and the Centre.
“Above1.5 crore, a smooth consistent methodology has been worked out in which statesand the Centre will be able to work shoulder-to-shoulder with regard to thequestion of revenue generation,” he said.
This,he said will not be a part of the Constitutional Amendment Bill, and will go into the GST Act.
The government is keen on passing the GST Bill in the currentmonsoon session of Parliament which ends on August 12. The Opposition has been demanding a lower GST rate and scrapping the additional 1 percent tax on inter-state sales.
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