Finance Minister Arun Jaitley today favoured levy of cess on tobacco and luxury products to compensate States for loss of revenue on Goods and Services Tax, GST. He said, cost of funding for compensation through an additional tax would be exorbitantly high and almost unbearable.<br/><br/>Explaining the rationale for cess, Mr Jaitley in a Fcebook post said, if the central government has to borrow money to fund states' compensation, it would add to its liability and increase cost of borrowing for the Centre, State governments and the private sector. He said, there is no rationale for increasing direct tax for this purpose.<br/><br/>Mr Jaitley said, two more meetings of the GST are proposed in the next month to decide issues including rates of tax structure. The Finance Minister further wrote, the four slab structure of 6, 12, 18 and 26 per cent was under consideration, with lower rates for essential commodities and higher bracket for luxury goods. He said, different items used by different segments of society have to be taxed differently otherwise the GST would be regressive.<br/><br/>He said, total tax eventually collected has to be revenue neutral. He said, the government should not lose money necessary for expenditure nor make a windfall gain.The Finance Minister said, the GST will result in the consuming States increasing their revenues from the very first year onwards. The GST council has fixed 14 per cent revenue growth as a uniform secular growth rate for all States.