GST Council · 2016-10-18 · New Delhi

3rd GST Council meeting: key decisions

Held on 18 and 19 October 2016, the third meeting concentrated on the compensation package for States and the first proposals for a GST rate structure. The Council fixed 2015-16 as the base year and agreed to an assured annual revenue growth rate of 14 per cent for computing compensation. It defined which State revenues would count as subsumed. Discussion on the rate bands began but the decision was deferred.

Chaired by Arun Jaitley, Union Finance Minister.

Other

  • Fixed 2015-16 as the base year for computing the revenue that States would be protected for under compensation.
  • Agreed to a fixed assumed growth rate of 14 per cent a year on base-year revenue for working out compensation over five years.
  • Decided that ITC reversals and certain State levies collected for local bodies such as mandis and municipalities, where subsumed in GST, would be included in base-year revenue.
  • Deferred the decision on the method of financing compensation for further examination by officers.

Rates

  • Began discussion of the multi-rate GST structure proposed by the Centre and deferred a final decision on the rate bands to the next meeting.

Official documents

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