GST Constitutional Amendment Bill in the Rajya Sabha will get life as Government hopeful with two new changes, the Union Cabinet on Wednesday approved two key changes to the Bill that effectively address the concerns of state governments and most of the Opposition.
Changes in Two major Clause:
- Contentious provision for a 1% additional tax burden on manufacturing States
- Added guarantee of 100% pay for compensation to States for next five years to make good any revenue loss suffered by them due to the introduction of the Goods and Services Tax.
This decision follows a crucial meeting of the Empowered Committee of State Finance Ministers with Union Finance Minister Arun Jaitley on Tuesday, where the States agreed that the one per cent additional levy be removed from the Bill, and it was also agreed during the meeting to include in the Bill the 100 per cent compensation formula for the first five years of the implementation of the GST.
However, All is not set on the ground as one of the major demands of the Congress, and one of the main reasons why the Bill is still stuck in the Upper House of Parliament.
The Centre had earlier planned to compensate the States for any revenue loss due to the GST that will replace the present indirect tax regime, in a phased manner — 100 per cent compensation in the first three years, 75 per cent in the fourth year, and 50 per cent in the fifth year.
Government leaving no stone un-turned to reach all political fractions to make the GST pass through in this session.