States ask FM Arun Jaitley to address revenue loss concerns before GST roll-out

States also demanded that the 2015-16 Budget should make adequate provisions for central sales tax (CST) compensation for early roll out of GST, a Constitutional Amendment Bill for which was tabled in the Lok Sabha last week.

AIADMK-ruled Tamil Nadu opposed introduction of the GST Bill without evolving a consensus on critical aspects like revenue neutral rates and bands, compensation methodology and thresholds.

"This is not acceptable to us. We would rather suggest that the Government of India should permit the empowered committee of state finance ministers to decide on these issues before enactment of the Bill," State Chief Minister O Panneerselvam said at the meeting.

Telengana, ruled by NDA ally TDP, sought provision in the Budget for compensation of revenue loss suffered by states due to reduction in CST. Kerala Finance Minister K M Mani said the concerns of the states should be addressed at the earliest, while BJP-governed Gujarat demanded that 1 per cent additional tax above the GST rates should continue until advised to the contrary by the states.

At the meeting, Jaitley said the biggest challenge before the country was to increase the growth rate as it would boost both economic activities and revenue collections.

"... As per different estimates, our growth rate would be above 6 per cent during 2015-16," the finance minister said, adding that the services sector had shown good growth while growth in manufacturing sector was a bit patchy.

The country is likely to clock a growth rate of 5.5 per cent in the current financial year, bettering 4.7 per cent of 2013-14.

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