The third GST council meeting was considered a crucial one because the government has set a deadline of 1 April 2017 for GST roll out and it is just five months away.
The three day meeting concluded yesterday evening i.e. 20th October, 2016. The agenda mainly discussed during the meeting was tax rate, compensation formula and assessment of persons registered under service tax.
The rate of GST is the most important and highly debatable issue as the prices of goods and services post GST will be completely dependent on it. A senior finance ministry official said that separate rate bands for essential and luxury goods is likely to be worked out.
A minister talking about the discussion on compensation formula said that this too is a difficult one to crack and find a consensus on. The first proposal was that the state could be compensated if the revenue under GST falls short of average tax earnings in best three years out of the past five years.
Second proposal was that out of the five years, two outliers are left out and an average is taken. If the revenue under GST is short of this, then states would be compensated.