The government has proposed that producing states' revenue losses would be made good by compensating them by 100% in the first three years, 75% in the fourth year and 50% in the fifth.
The chairman of Empowered Committee of State Finance Ministers KM Mani on Friday said that while there was broad consensus on the constitutional amendment bill for goods and services tax (GST), some fine tuning was still required to accommodate valid demands of some states.
"By and large, there is consensus among all states for the bill but some producing states want full compensation (for loss of revenue due to GST implementation) for all five years (instead of decreasing percentage of compensation with year)," he told dna.
The government has proposed that producing states' revenue losses would be made good by compensating them by 100% in the first three years, 75% in the fourth year and 50% in the fifth.
Mani, who is also the finance minister of Kerala, said issues raised by state finance ministers would be further discussed in depth at the Select Committee of Rajya Sabha meeting on GST on June 16.
"Our (empower committee of state finance minister) memorandum on constitutional amendment bill for GST will be submitted to Select Committee on June 16 for further discussion," he said.
The GST bill, which will subsume all the current indirect taxes, was passed in Lok Sabha during the Budget session of Parliament. It has yet to be cleared in the Rajya Sabha.
The government expects to roll out GST by April 1, 2016, which is a tight deadline considering that its backbone infrastructure has yet to be put in place and corporates and traders have to prepare for it.
Finance minister Arun Jaitley has said the government was confident of rolling it out by April next year. Once the bill is cleared in both houses, the GST council would work out the Revenue Neutral Rate (RNR), which is as per early estimate is pegged at 27%, which is considered high by tax experts.
Mani was in New Delhi on Friday to address a conference organised by the Indirect Taxes Committee of ICAI on GST.
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