GST won’t be capped, affirms Finance Minister Arun Jaitley

Finance Minister Arun Jaitley has clearly stated that because of a "broad consensus" amongst all Indian states, the upcoming Goods and Services Tax would not be capped, as demanded by the opposition Congress party.

"It is record attendance. And so far every state has given its view on GST itself. Virtually every state has supported the idea of GST. There is one state, that has expressed some reservations. It is Tamil Nadu. However, they have said that they are trying to see it from their point of view and they have offered some suggestions. These are being discussed in the meeting. So effectively, every state has either supported or accepted the idea of GST, " Jaitley told reporters after the first round of GST meeting in Kolkata.

He added that constitutional validity on the cap of Revenue Neutral Rate is not acceptable, as the constitution doesn’t allow for it.

It is, however, still not clear if this demand by the Congress-ruled states will be overruled by the committee.

"There was a complete consensus on the fact that there should not be a constitutional cap because contingencies might arise in future. The quantum of taxation is fixed by the GST committee and it is best to be left with the discretion of the committee," Jaitley added.

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