Extra tax of 1 percent to compensate states post-GST roll-out

New Delhi, Dec 22: Reiterating his assurance to states that they would not lose "even a rupee of revenue" due to the proposed Goods and Services Tax (GST) regime, Finance Minister Arun Jaitley Monday said the Centre proposed to levy a non-vatable additional tax on goods involved in inter-state trade, to be assigned to states. According to a finance ministry statement here, Jaitley told the parliamentary consultative committee that "it is proposed to levy a non-vatable additional tax of not more than 1 percent on supply of goods in the course of inter-state trade or commerce". While this tax on supply of goods will be levied for 2 years, a period that is extendable if recommended by the GST Council, "this additional tax shall be assigned to the states from where such supplies originate," the statement added. The Centre will compensate states for a period up to five years for any loss of revenue arising from implementing the GST.