Non-NDA states demand 5-yr relief in GST reforms

Opposition-ruled states on Friday demanded that all states be compensated for 5 years for the likely 2 lakh crore a year revenue loss due to the Centre's GST reform proposal.

- Press Trust of India

Ministers from eight opposition-ruled states — Himachal Pradesh, Jharkhand, Karnataka, Kerala, Punjab, Tamil Nadu, Telangana, and West Bengal -- also sought a mechanism to guard against profiteering by businesses post tax rate cut to ensure the benefits reach the common man.

The states suggested that an additional duty be levied on sin and luxury goods in addition to the proposed 40% rate to maintain the current tax incidence. The proceeds from this levy should be distributed among states.

These states will present their proposals before the GST Council, chaired by the Union finance minister and comprising all state ministers, at the September 3 and 4 meeting.

The Centre has proposed that the GST be made a 2-tier tax structure of 5 and 18%, as against the current 4-slab structure of 5, 12, 18 and 28%, plus a compensation Cess.