Planning Commission member Abhijit Sen has said the model GST law, as proposed by the 13th Finance Commission, leaves no room for negotiations on the Rs 50,000-crore compensation to be given to the states towards revenue losses under the new tax regime.
“What the Finance Commission has done is that they have given a model and said: ‘if you can accept this model, Rs 50,000 crore goes to the states, if you don’t, you don’t get the money’,” Sen said.
The rigidity in the formula, he added, would make it difficult for the Centre and states to accept it, as the discussion on the framework of proposed GST was still on and it could not be taken as given.
Sen’s statement had come ahead of the meeting of the empowered committee of state finance minister.