As the Centre and states kick off consultations to decide the crucial rate for the goods and services tax (GST), the Modi government is all set to back a pocket-friendly rate, amid indications that a standard rate of 18-19% might receive the government’s backing.
On Monday , the Cabinet cleared the establishment of the GST council -the panel headed by the Union finance minister with all state FMs as its members -setting the stage or nuts and bolts issues to be thrashed out, with the government setting a two-month window for the exercise.
States such as Kerala have been vocal in suggesting the evy should be upwards of 20% to ensure that state revenue collections are not impacted by the GST rollout from April.
“We need to ensure that the basket that makes up the consumer price index is not affected. The message is clear that gareeb ki thali (poor man’s plate) should not get expensive.The CPI (consumer price index) basket will not be impacted.There is commonality of focus (between the Centre and states) on this,“ said a source, adding that the rate could be lowered but not raised at the expense of the common man’s “thali (meal)“. Sources said the Centre wo uld in any case compensa te the states for any reve nue loss for five years on account of GST implementation but added that the negotiations would be challenging. A consensus will quicken GST rollout but a stalemate over the rate and other issues such as exemptions, compensation formula and nitty-gritty of draft legislation will require more political negotiations.
Hindustan News 13/09/2016: http://epaper.livehindustan.com/