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Last Updated : Sep 23, 2016 07:49 PM IST | Source: PTI

States happy with outcome of GST Council's first meeting

At the first meeting of the GST Council, states proposed certain formulae based on their revenues for calculating compensation while the Centre proposed compensating states if the revenue growth rate falls below 12 percent.


Left-ruled Kerala today sought a decision on the formula for compensating states for any loss of revenue post GST before a rate is decided even as most others hailed the decisions taken at the first Centre-State council meeting on the new tax regime.


At the first meeting of the GST Council, states proposed certain formulae based on their revenues for calculating compensation while the Centre proposed compensating states if the revenue growth rate falls below 12 percent.


"The Centre had suggested an average of last three years of revenue, some states said it should be best of three years out of five. Then the Centre went back and suggested that it should be based on pan-India revenue growth rate of 12 percent. Almost all states are in agreement that it has to be the best of three years out of five," Kerala Finance Minister Thomas Isaac said.

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The compensation needs to be thrashed out before deciding the rate, he said.


Gujarat Minister of State for Finance Rohit Patel proposed the formula of the best three of the last 10 years for calculating compensation to states while West Bengal put it at the best three of the last 6 years.


Chhattisgarh Finance Minister Amar Agrawal said all states were on board for GST implementation by April 1, 2017.


The states and the Centre today agreed to Rs 20 lakh as the turnover limit for exemption from GST, with states saying their share of revenue would be protected.


"Delhi wanted that the exemption threshold should be kept at Rs 25 lakh, but the Council decided on Rs 20 lakh. Our revenues will be protected," Delhi Deputy Chief Minister Manish Sisodia said.


Uttar Pradesh Minister of State for Skill Development Abhishek Mishra said the state is happy with the Rs 20 lakh figure and it would be hassle free for traders.


Haryana Finance Minister Captain Abhimanyu too said there will be no loss of revenue to the state.

"We would like to be fully compensated and the Centre has given that assurance. Now only the broad modalities are to be decided," he said.



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First Published on Sep 23, 2016 07:20 pm
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