The government is trying to find a middle ground to break the Goods and Services Tax (GST) deadlock. A viable compensation structure for likely revenue loss to states has become a major stumbling block. The finance ministry is now proposing a new law for addressing the states concerns which will have the backing of the parliament. And not just this but the centre is also planning a 3 tranche payout on cst dues to states, reports

The centre is proposing a separate central law which will be autonomous in nature and that could take care of the state’s demand for an independent compensation mechanism for GST reports CNBC-TV18’s Sapna Das. The state governments have been saying to make this a part of the constitution amendment bill but the centre is not okay with that. So, probably as a via media they are proposing a separate central law which will take care of the GST compensation that will be autonomous in nature. A committee of officers will be set up comprising of representation from the states as well as the centre, to work out the modalities and the formula for the GST compensation. On the other hand, in terms of the Central Sales Tax (CST) which is a more immediate issue, the number stands at around Rs 34,000 crore in terms of CST arrears which have to be paid out to the state governments. The centre is probably going to do this in three installments. The first installment might actually come up as early as the winter session of parliament and if the centre’s revenue position continues to be okay then it could be possible that Rs 10,000 to 11,000 crore of the CST arrears might actually get paid out in the winter session of parliament itself though of course they will have to seek a supplementary to the Budget because there is no provision in the Budget this year so far on the CST arreras. The finance minister is very keen to push the constitutional amendment bill for GST in the coming winter session of parliament. These are some of the proposals that the centre has in mind to basically iron out its differences with the state government and somehow try and set the ball rolling on the GST front.