GST Council Faces Crucial Decision on Tax Reforms
Finance ministers from opposition-ruled states met to discuss compensation for revenue loss due to GST reforms. The Centre's proposal to alter tax slabs has raised concerns among these states. A decision is expected at the 56th GST Council meeting chaired by Union Finance Minister Nirmala Sitharaman.
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Finance ministers from opposition-ruled states convened in anticipation of the critical GST Council meeting, where they decided to seek compensation for revenue losses following GST rate changes. The ministers, representing states like Himachal Pradesh, Jharkhand, and Kerala, expressed concern over the potential impact of slab removal.
Jharkhand's Finance Minister, Radha Krishna Kishore, highlighted his state's expected Rs 2,000 crore revenue loss if the Centre's GST reform plan advances. He emphasized the necessity of federal cooperation, stating that state approval relies on the Centre's compensation assurances.
The forthcoming GST Council meeting, chaired by Union Finance Minister Nirmala Sitharaman, is set to address the 'next-gen' GST reform proposal. This plan, which suggests reducing tax rates to 5 and 18 percent, could significantly affect state revenues, igniting debate on the compensation mechanism post-2022.
(With inputs from agencies.)
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