At the two hour long meeting the Empowered Group of State Finance Ministers (EGSFM) had with Finance Minister Pranab Mukherjee no concrete decision as to the date of introduction of the GST could be taken. “We will meet the finance minister again by this month end to further discuss issues relating to the GST,” EGSFM Chairman Ashim Dasgupta told reporters after the meeting.
“As he (Mukherjee) is busy with pre-Budget consultations we will discuss the (GST) issues in another meeting,” he said. At the meeting, the issue of compensating states in lieu of Central Sales Tax (CST) was discussed at length. Dasgupta said Mukherjee suggested that out of revenue loss of Rs 14,000 crore suffered by the states in lieu of CST during the current fiscal, Centre would compensate states to the tune of Rs 5,000 crore by transferring the Service Taxes earned on 33 selected services.
Of the remaining Rs 9,000 crore Centre would compensate states half the amount while the states would have to bear the burden of the other half, Mukherjee suggested. States would respond to Mukherjee’s suggestion after discussing it in details, Dasgupta said.