GST cloud on states' sops for industry

As GST is a destination-based levy, states will not be able to waive it to encourage industry

With the goods and services tax (GST) being destination-based, states might be unable to provide incentives to encourage local industry.

At the GST Conclave in New Delhi, Revenue Secretary Hasmukh Adhia on Tuesday said, “States are wondering how to continue with promised benefits. Any incentive has to be by way of the Budgets.”

States offering the incentives might not even be able to collect taxes, he added. In inter-state sale of goods, the destination states would collect the tax. 

Some states currently offer incentives through refunds. As the value-added tax is origin-based, some states pay back the producers, irrespective of