Economy

States inching towards consensus on GST roll out

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The states have agreed that instead of a single rate for GST there would be a floor rate with a band, giving freedom to states to fix their own rates

Bhubaneswar: The Centre and the States have reached a broad consensus on the structure of the proposed goods and services tax (GST), with states getting freedom to decide on the time of its introduction.

At a meeting of the Empowered Committee of State Finance Ministers in Bhubaneswar, Chaired by Bihar’s deputy Chief Minister Sushil Kumar Modi , it was agreed that instead of a single rate for GST there would be a floor rate with a band, giving freedom to states to fix their own rates.

On issues where consensus is elusive, they have decided to form three sub-committees to resolve the issue of an integrated GST to be levied on inter-state trade and a revenue-neutral tax rate that will ensure states won’t suffer a revenue loss. The sub-committees have been asked to submit their reports within three months.

The GST proposes to replace the plethora of indirect taxes with one single levy, a system that will help all stakeholder governments, business and consumers by preventing leakage, cascading of taxes and lowering the incidence of tax.

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