Karnataka Chief Minister Basavaraj Bommai, in an exclusive fireside chat, tells CNBC-TV18’s Timsy Jaipuria that the GST Group of Ministers on rate rationalisation will take in account the views of all states, the Union finance ministry, and other stakeholders before finalising its report. On the protected revenue or the window for compensation ending in June 2022, Bommai asks, "Which state would not want compensation to continue?"
Here are edited excerpts from the interview:
Q. You are the chairman of the GST Council committee on rate rationalisation. A much-awaited report is expected from your committee. To be precise, the (GST) council is waiting so that they can call a meeting based on the report. Where are we on that, what is your view?
A: We have already held two meetings and most of the work — almost 70-80 percent — is already done. There are some policy decisions which we are yet to take up and we are going to have a meeting very shortly and take a call.
We will take the consent of all the states concerned, as well as the Government of India and and are going to take a conscious view on the major policy decisions regarding the slabs and the rates of the items.
Shortly we are going to have a meeting and we would like to conclude everything and submit our report.
Q. There was a buzz that 5 percent can be hiked to 7 percent or 8 percent, and 12 percent and 18 percent to be brought at a round 15 percent. Do you think that is coming in your report? Has the GoM considered a merger of slabs and hiking the 5 percent slab?
A: No, we have not taken it up as yet in the meeting. We will now take it up. All these things are there — we have to deliberate on these issues and then take a decision. So I can't tell you my views before the deliberations.
Q. But are you in favour of revising the slabs and the rates as the revenue neutral rate is at around 15 percent and the current rates are aligned at around 11 percent?
A: All these things are there and we are yet to deliberate on these matters. Deliberations will soon end.
Q. With compensation window expiring in June 2022, do you think that Karnataka revenues are stable and the state would not need compensation beyond June 2022?
A: Which state does not want additional support in terms of compensation? All states want it.
Q. Have you demanded that the compensation window be extended?
Ans: These are all policy matters I cannot discuss.
