GST Rollout Will Cost The Centre More: Amit Mitra
Centre may have to look at imposing a cess on items other than demerit and luxury goods.
States like West Bengal and Kerala continue to demand for higher compensation once the Goods and Services Tax is rolled out. West Bengal Finance Minister, Amit Mitra, reiterated his earlier stance that more states need to be compensated in wake of the central government's demonetisation of high-value currency notes. Mitra was speaking after the conclusion of the first day of the eighth GST Council meeting in New Delhi.
Tax collection in West Bengal fell 2 percent in November versus 11 percent growth a year ago, Mitra said.
The West Bengal finance minister pegged the quantum of compensation that will be required at Rs 90,000 crore, according to wire agency PTI.
The Centre may have to look at imposing a cess on certain products outside the demerit and luxury goods, said Kerala Finance Minister, Thomas Isaac.
The GST Council had earlier decided to impose a cess on luxury items like high-end cars and demerit goods including tobacco, pan masala and aerated drinks, over and above the highest tax slab of 28 percent, to fund the Rs 55,000 crore compensation needed to pay the states to make up for their tax collection shortfall. This formula though was approved before the government's demonetisation drive, which some states claim will have a bigger impact on its finances.
‘April 1 Deadline Unlikely’
On the GST timeline, Delhi’s Deputy Chief Minister Manish Sisodia said rolling out the new indirect tax regime by the designated deadline of April 1 was unlikely. Gujarat’s Finance Minister Nitinbhai Patel hinted at the possibility that GST may be rolled out by September 1, 2017.
The Council was expected to discuss the long-pending issue of dual control but that was not taken up on Tuesday. It is likely to be raised on Wednesday when the GST Council meets again.