Third GST meet result

The three-day meeting of the GST council ended with no consensus on the GST rate. It worked out a compensation formula for states and is now fighting for finalization of GST rate. The council will now resume discussions on November 9-10. The finance ministry had earlier stated it would try to get a consensus on all issues to push through Central GST (CGST) and Integrated GST (IGST) legislations in the Winter Session of Parliament beginning November 16.

The central government proposed a four-rate structure comprising two standard rates – 12 % and 18 % and the lower rate of 6 % for essential goods, 4 % for commodities like gold to 26 % plus cess on so-called sin goods. The council is looking at a peak rate for demerit goods such as ultra-luxury items, tobacco products, as well as environmentally-harmful products in order to equalize the levy to the current level of tax.

However, issues rose when cess proposed on sin goods to fund the compensation to be paid to states for losses arising from a transition to GST. It is likely to emerge as a key point of disagreement between the Centre and the states as the latter have always opposed the levy of central cess excluded from the divisible pool of taxes.

Jaitley had said once the rate structure was finalised, the technical group of officers would decide categories for the goods and services. Differences aside, the country has moved a step closer to the rollout of the GST, the deadline for which is April 1.