Panaji, Sep 24 (PTI) Goa Chief Minister Pramod Sawant on Tuesday said the GST Council's decision to slash tax on tourism services will not affect revenue collection in the state.

Sawant reasoned that the move is set to boost tourism in the state which will compensate the potential revenue loss.

In recent meeting, the GST Council resolved to decrease tax on hotel room tariff from 28 per cent to 18 per cent.

Sawant said Goa has witnessed a 26 per cent deficit in its GST collection, which is being compensated by the Centre.

"The Centre will continue compensating us for the difference for another two years. We will take appropriate measures in consultation with the Union government after that," he said.

Tourism is the mainstay of revenue for the coastal state which is a preferred beach destination for domestic as well as foreign tourists.

GST hotel tariff cut expected to be offset by tourism growth and central revenue compensation. The GST Council reduced tax on hotel room tariffs; the state expects increased tourism will compensate potential revenue loss. The state has faced a substantial GST collection shortfall that the Centre has been compensating, and that central compensation will continue for a limited period. The state intends to consult the Union government thereafter to adopt appropriate fiscal measures, relying on tourism as the principal revenue source to mitigate the impact of the tariff reduction.