Earlier States objected to the use of GST collections (cess on GST) to finance revenue loss compensations to the states due to shifting to new tax regime. But now before the next meeting of GST council to be held on 3rd and 4th November , the view of states being compensated through a cess rather than a hike in the proposed GST rate has gained strength.
Central government telling them that an increase in the tax rate has to yield around Rs 1.72 lakh crore. On the other hand, a cess which will yield Rs 50,000 crore a year would be enough to compensate states.
The next GST Council meeting’s will be a packed on 3rd and 4th November and likely to decide on the much-awaited GST rates.