FM flexible on 1% additional tax, releases draft GST Bill

Finance Minister Arun Jaitley met state finance ministers in Kolkata on Tuesday to discuss the long awaited Good and Service Tax (GST). The finance ministry also released the model GST Law. It can be downloaded here.

FM Arun Jaitley along with empowered committee of 22 states finance minister attended the meeting in Kolkata to discuss the overall framework of the bill and its bones of contention. 

After the meeting, Jaitley said that except Tamil Nadu, every state has supported the idea of GST. Tamil Nadu has offered some suggestions which have been taken note of, he said. 

In regards to 1% additional tax, Jaitley said that the government is ‘flexible’ on the issue. 

Clarifying about the compensation issue raised by states, Jaitley stated that there was a complete consensus on there being no constitutional cap.

The amended GST bill proposes compensation to states for any loss of revenue from the implementation of GST for a period of five years.

Jaitley stated that his effort will be to resolve all the differences of opinion among the states and initiate to pass the bill during monsoon session.

The central GST (CGST) will be framed based on the model GST law, he said.

The states will draft their own state GST (SGST) based on the draft model law with minor variations incorporating state-based exemptions. Once, GST bill has been framed, then IGST and SGST bill will be enacted.

West Bengal finance minister Amit Mitra will hold a meeting in July to discuss the RNR issue.