New Delhi, Oct 18 (IANS) The Goods and Services Tax (GST) Council, at the end of day one of its meeting here on Tuesday, decided on the issue of compensation for states, Finance Minister Arun Jaitley, who chaired the session, told reporters.
“One main issue in today’s (Tuesday) agenda was to calculate the compensation for states and this matter was concluded in the discussions held,” Jaitley told reporters here following the third meeting of the council. The meeting is slated to continue over the next two days.
Declaring that 2015-16 has been agreed upon as the base year for calculating compensation, Jaitley said the council has agreed on the parameters to be included in the definition of revenue for compensating states.
“The council discussed as to what would be the basis for calculating revenue in the first 5 years, that is, the compensation period. It was agreed that a 14 per cent secular rate of growth would be treated as a possible growth rate as far as revenue is concerned.”
The council will discuss the crucial issue of GST rates on the second day of its meeting on Wednesday.
“At least five rate structure options were presented to the council today,” Jaitley said, adding that the final structure will be decided after discussing and analysing all of them.
“The rate structure should be such that it does not lead to further CPI (consumer price-indexed) inflation Revenue must be such that states and the Centre are able to discharge their functions, putting the least burden on the taxpayer,” he said.