Tapping the GST growth opportunity

Recent buoyancy in GST collections should be used to usher in reforms in the tax system

The compensation regime for states under the Goods and Services Tax (GST) came to an end on June 30. The commitment made at the time of rolling out the GST in July 2017 was that compensation would be paid to the states for five years if the annual growth in their revenues was less than 14 per cent.

But many states, particularly those ruled by political parties other than the Bharatiya Janata Party, want the compensation regime to continue a little longer. Some states want this to continue for another five years. The demand was also raised a couple of days