Haryana finance minister Ajay Singh Yadav has suggested that the items of the essential nature should not be taxed at the same rate at which items of luxury or of non-essential nature were taxed. Yadav, who was speaking in a meeting of empowered committee of state finance ministers held at New Delhi and presided over by Union finance minister Pranab Mukherji, said that a single rate structure, even in a phased manner, was not acceptable to Haryana. Therefore, in the interest of common man a dual rate structure should be introduced in the country.
He said the state agrees with the proposition that the actual rate of SGST can only be decided after various GST parameters are sorted out and finalised. He said the compensation on GST be paid to the state on monthly basis in the form of special grant-in-aid. Also, an independent agency should be set up to deal with the GST compensation related issues and payments.
Yadav suggested that for calculating the revenue loss, the preceding year of the GST introduction year should be adopted as the base year and for calculating the average rate of growth, the states should be allowed to choose three of their best years out of the preceding five years. While referring to the CST, he pointed out that as suggested by the empowerment committee, initially 2% CST (as transaction tax) might be retained even after GST is implemented as the same would help in keeping the compensation amount low.