The third meeting of the GST Council ended on Wednesday, a day earlier than scheduled, without reaching a consensus on the rate structure of the new indirect tax regime. The council ended its meeting abruptly, and is now scheduled to meet again on 3-4 November, and thereafter on 9-10 November, Finance Minister Arun Jaitley told reporters at the press briefing.
The council also could not arrive at a final decision on imposing a cess or additional tax on demerit goods to fund compensation to states for tax revenue lost in the first five years of GST. The proposed cess will be levied over and above the GST on luxury items, like big cars and also sin goods like tobacco and alcohol.
GST rates will also depend on the source of funds on basis of which the compensation to the losing states will be funded. On this issue, we have virtually converged towards a consensus, the formal announcement of that, after working out the details will be made in the next meeting itself.Arun Jaitley, Finance Minister
The GST rate structure would be decided only after the source of funds for compensation has been finalised, the finance minister added.
“The funding mechanism for compensating states, whether it should be by way of higher tax or through a cess, will have to be discussed and decided,” Adhia said, after the finance minister’s press briefing.
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