GST: People to benefit; states to gain from Day 1, says FM

Tribune News Service

New Delhi, December 22

Finance Minister Arun Jaitley today said Goods and Services Tax (GST) will benefit most of the states from Day 1, especially the consumer states.

He said to remove any apprehension among the states about the fall in their revenue collection, provisions have been made in the Constitution Amendment Bill on GST introduced by him in the Lok Sabha last Friday to ensure that none of them lose any revenue after the implementation of the GST.

The Finance Minster was speaking here today at the Meeting of the Parliamentary Consultative Committee attached to his ministry.

He said it is proposed to levy a non-VAT-able additional tax of not more than 1% on supply of goods in the course of inter-state trade or commerce. The Finance Minister said this tax will be for a period not exceeding two years, or further such period as recommended by the GST Council. This additional tax on supply of goods shall be assigned to the states from where such supplies originate.

The Finance Minister said the states have been ensured that there will be no revenue loss and the Centre will compensate states for any loss of revenue arising on account of implementation of the GST for a period up to five years. He said a provision in this regard has been made in the Constitution Amendment Bill. He said the compensation will be on a tapering basis which means 100% for first three years, 75% in the fourth year and 50% in the fifth year.

Jaitley briefed the members about the series of meetings held by him with the Empowered Group of State Finance Ministers wherein concerns of the various states were addressed. The Finance Minister said as the volume of trade expands and the growth momentum picks up, then every state will be benefitted with the rise in their revenue collection with the implementation of GST.

Replying to various queries of the Members, the Finance Minister said GST will help in reducing tax on tax and therefore, will be beneficial to the consumers. Besides it, GST will also be beneficial to the Centre, states and industrialists, manufacturers, common man and the country at large since it will bring more transparency, better compliance, increase in GDP growth and the revenue collection of both states and the Centre.