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Bhopal City
States’ interests will fully be taken care of in GST structure: Jaitley
14-08-2014

BHOPAL: The Union Finance Minister, Arun Jaitley, in a letter written to Madhya Pradesh Chief Minister Shivraj Singh Chouhan on Wednesday said that interests of states will fully be taken care of while finalising the GST structure.

Jaitley was replying to Chouhan’s letter expressing concerns of the state following introduction of GST. The Union Minister has assured that the central government would make all efforts to bring on board all state governments in adopting GST by addressing their concern.

Jaitley informed that since the revised draft the powers of the GST Council has been proposed to be recommendatory in nature it would not take away the legislative autonomy of the State Legislatures. The central government is working on a formula for arriving at a Revenue Neutral Rate (RNR) which obviates any revenue loss to any state.

In addition, in the revised draft states have been empowered to levy additional 2-3 per cent tax by way of band above the floor rates. This will suitably compensate states the revenue loss, if any, due to RNR. Centre is also committed to compensate the states in case of loss of revenue, he added.

Jaitley further informed that the central government has already set up a SPV namely GST Network to provide a strong IT infrastructure and service backbone in respect of inter-state trade of goods and services. The GST Network will fully take care of timely transfer of funds to the importing states in respect of taxation of inter-state supply of goods and services.

The Empowered Committee has already constituted a committee to draft the Place of Supply Rules and that committee is likely to submit its report shortly. The Empowered Committee has also constituted a committee to look into issues relating to dual controls, exemption etc.