As Centre and states get ready to start discussion to decide rate for the goods and services tax (GST), the Centre is all set to back a pocket-friendly rate, un middle of indications that a standard rate of 18-19 percent might receive the government's backing.
On Monday, the Cabinet gave green signal to the establishment of the GST council, the committee headed by the Union finance minister with all state FMs as its members, clearing stage for issues to be thrashed out with the government.
Some states like Kerala have been suggesting that levy should be upwards of 20% to ensure that state revenue collections are not impacted by the GST rollout from April.
"We need to ensure that the basket that makes up the consumer price index is not affected. The message is clear that gareeb ki thali (poor man's plate) should not get expensive. The CPI (consumer price index) basket will not be impacted. There is commonality of focus (between the Centre and states) on this," a source was quoted as saying by ‘The Times of India’.
He added that Centre would compensate states for any revenue loss for five years on account of GST implementation. He however added that negotiations would be challenging.