Various states are lobbying centre to keep GST rate over 20% to curb revenue loss. This is way over 15%-18% rate suggested by panel headed by chief economic advisor.
Revenue neutral rate worked out to be 27% (What is Rvenue nuetral rate?). Finance minister had said that GST Rate would be substantially less than 27%. Kerala FM Thomas Isaac had advocated a rate of 22-24% during the meeting of the empowered committee of state FMs on July 25.
Experts believe that a rate higher than 18-19% will have huge neagitve impact on consumer and consequently, result in inflation. The states’ tough stance on GST rate comes at a time when the opposition i.e. Congress is in the favour of 18% ceiling on GST Rate, saying that anything higher would be inflationary and impact the common man.