Revenue Neutral Rate (RNR) is the rate at which there will be no revenue loss to the states after GST implementation.
“These are the figures which would be decided by GST Council,” he added.
The GST Council will have Jaitley as its Chairman and comprise two-third of members from states and one-third from the Centre.
GST is termed as the biggest indirect tax reform since 1947. A single rate GST will replace central excise, state VAT, entertainment tax, octroi, entry tax, luxury tax and purchase tax on goods and services to ensure seamless transfer of goods and services.
Allaying concerns raised by some of Lok Sabha members regarding the 27 per cent RNR speculation, Jaitley said “it is going to be too high and therefore the cost and prices itself will go up”.
He clarified to the House that the number was not given by the government or the GST Council but by a particular organisation in its own internal assessment.
“It got leaked out and somebody said it is 26.8. so that is how this figure of 27 per cent was born,” he said.
However, without hazarding a guess as to what the final GST rate would be, Jaitley said, the 13th Finance Commission had suggested 18 per cent as a possible figure.