Bhubaneswar, Nov 4 (IANS): The Odisha government on Friday welcomed the zero tax rate on common food items and reduction in tax rate from 6 to 5 per cent by the Goods and Services Tax (GST) Council.

"In the interest of the common man, the state government has always been pursuing no tax or lowest possible tax policy on daily consumable goods. The state government, therefore, welcomes zero tax rate on common food items and reduction in tax rate from 6 to 5 per cent by the GST Council, as demanded by the state government," said a release from the Chief Minister's Office.

The state government also welcomed the decision of the GST Council to recommend compensation by the Central government to the states on implementation of GST with 14 per cent growth in collection of tax for the base year 2015-16.

The Council has finalised that GST will be levied at multiple rates ranging from 0 to 28 per cent.

The state government, however, opposed the introduction of cess.

"The Odisha government has always been of the view that the introduction of cess will distort the GST structure. Therefore, the decision to continue Clean Environment Cess on coal etc. for compensation to all the states has been opposed by us," said the release.

It said the state government would continue to ask the Central government to enhance royalty on coal and share most of the cess collected on coal with the coal bearing states instead of it being shared for compensating all the states for introduction of GST.