According to official sources, the GST Council is going to devise new mechanism on how additional funds would be found to bridge the states’ GST ‘revenue shortfall’, given that the designated corpus has fallen short of the requirement. The new mechanism will include restructuring of GST slab rates, hike cesses or implement new such imposts. “Whatever money comes in that (compensation) fund, only that money can be paid (to states). Now, if there is a shortfall (against states’ guaranteed revenue growth of 14%) which is more than what could be overcome by compensation fund, the GST Council will take a decision on what measures can be taken to either increase the cess amount or consider the rates or take any other measure”. The Council, according to sources, could look at imposing cess on items in the 18% tax bracket if there is a consensus that these items can be classified as non-essential.
