After the meeting on the passage of the much-talked-about tax reforms chaired by Finance Minister Arun Jaitley, GST panel head Amit Mishra said that a broad consensus has been worked out so that the common man does not face the tax burden and the states do not suffer in terms of revenue earnings as well. The Finance Minister has unanimously decided that the removal of dual control between centre and the state is essential for the functioning of GST bill.
He also added that incidence of tax on the common man has to be significantly reduced so that the trends of revenue with the states can continue. Besides the reduction in tax burden, the centre has also guaranteed compensation for five years to loss suffered by states.
So far, 21 states have opted for full control and insisted no dual control upto Rs 1.5 crore revenue.
Amit Mishra also mentioned that the dual control has not been taken up in the amendment bill and therefore will be introduced in the Goods and Services Tax Act. He said that further work will be done to reflect works of the empowered Committee.
The ruling government will meet the opposition this week to decide the introduction of the GST bill in Rajya Sabha in the monsoon session of the parliament. Kerala Finance Minister K.M.Mani said that the states favour dispute resolution by the GST council and decision on revenue-neutral rate on GST shall be taken up later. However, there has been no consensus so far on capping the GST rate.
The GST rate cap will not be a part of the Constitutional Amendment Bill and 1% manufacturing tax will be removed from the bill. Haryana Finance Minister Abhimanyu Singh Sindhu said that GST bill will hopefully be passed in this parliament session and will be rolled out by 2o17. The revenue neutral rates are also expected to be lower than current indirect tax rates.