New Delhi: The government will make a 7-member committee to discuss the Kerala cess proposal, finance minister Arun Jaitley said at the 30th meeting of the all powerful GST Council.
This committee will have members of North East, hill and coastal states. Names of the committee members will be announced soon, Jaitley said.
The Council also reviewed revenue trends and deficit of states, he said, adding state deficit this year is 13 per cent and may reduce further as consumption picks up.
GST collections in many North-east states is above expectation. Regarding the revenue shortfall in consuming North-east states, the FM said that a detailed presentation about revenue position took place. “It had been decided earlier that GST council secretary will visit revenue deficit states and analyse it. It was found that there's no revenue shortfall in N-E”, Jaitley added.
He said that Bihar has benefited from additional VAT. He said, “Bihar imposed additional VAT in 2015-16 when tax reduced due to the prohibition of alcohol. Taxation inflated by 27% as compared to the previous year. Bihar benefited from this aberration”.
He said the deficit in revenue collection targets of states under the GST came down to 13 percent till August this year compared to 16 percent last year, which may come down further by one to two per cent by end of the year considering the high consumption.
"We have to neutralize the state deficit to zero by the expiry of the five-year period (of GST implementation)... Closer it gets to zero, states would get closer to achieving their revenue targets themselves," he told reporters.