These 8 states raised questions on the government's proposal on GST reform, and will put forward this demand in the council meeting.

GST 2.0: The government's proposals regarding GST reforms are expected to get the green signal in the GST Council meeting. During this, eight opposition states are also going to present their special demands.

GST 2.0:  The GST Council meeting will be held on 3-4 September, in which a decision will be taken on the government's proposals regarding GST reforms. The people of the country have a lot of expectations from this. However, there are 8 opposition states in the country, which can put forward their demand in this.

In fact, these eight states ruled by opposition parties say that the government's proposal to restructure the slabs in Goods and Services Tax (GST) will result in a revenue loss of about Rs 1.5 lakh crore to Rs 2 lakh crore annually for all the states. In such a situation, the Center should compensate for this loss for five years. 

This is what these 8 states have to say 

Speaking to the media on Friday, ministers from Karnataka, Himachal Pradesh, Jharkhand, Kerala, Punjab, Tamil Nadu and Telangana, along with a representative from the West Bengal government, demanded a mechanism to avoid profiteering after tax cuts and ensure that businesses get the benefit so that the common man can benefit.

The states have suggested that in order to maintain the revenue generated from the existing tax slab, additional duty should be imposed on luxury and sin goods in addition to 40 percent. A part of the income from this should be distributed among the states so that the revenue loss incurred by them can be compensated. All these states have decided to present their proposal in the next meeting of the GST Council. 

Instability in the fiscal structure due to the loss of revenue 

The Centre has not estimated the revenue loss from rationalising rates. However, Karnataka Finance Minister Krishna Byre Gowda said each state is expected to lose 15-20 per cent of its current GST revenue. He also rejected the claim that tax revenues would jump after the rate cut. "A 20 per cent reduction in GST revenue will seriously destabilise the fiscal structure of state governments across the country," Gowda said. He further said states should be compensated for 5 years, which can be extended further till revenues stabilise. 

 

Punjab Finance Minister Harpal Singh Cheema also demands that a mechanism should be created to detect profiteering so that the benefits of rationalization of rates can reach the common man. These states have also demanded that the base year for calculating revenue conservation be fixed as 2024-25.