Countdown to GST: Council to finalise tax rates of remaining goods on Saturday
The Goods and Services Tax (GST) Council will finalise the contours of the new indirect tax system on Saturday, in its 15th meeting as it is slated to be rolled out in the next four weeks.
The Council, headed by Finance Minister Arun Jaitley is likely to approve amendments to the draft GST rules. Rates of few contentious items such as textiles, footwear, gold, beedis and cigarettes, biscuits, bio-diesel and agricultural implements are likely to reach consensus.
Rates of these items could not be decided in the previous meeting owing to lack of time and a difference of opinion among various members of the Council.
In addition, cess on some commodities will also be on the agenda for Saturday meeting.
According to sources, the broad framework of an anti-profiteering machinery is being worked out by tax officials and will also be taken by in next meeting. An ‘anti-profiteering’ clause has been provided in the Centre GST (CGST) and State GST (SGST) laws, in order to ensure that business passes on the benefit of reduced tax incidence on goods or services to the consumers.
Setting up of such a framework will ensure that the companies don't arbitrarily raise prices of goods just before or after the implementation of GST from July 1.The Centre has time and again reiterated that the overall impact of new tax rates is non-inflationary.
The last Council meeting in Srinagar saw finalisation of rates over 1,200 goods and 500 services. The main challenge lies is front of the government is timely and smooth implementation of the new tax regime.
GST, billed as India’s most ambitious reforms move, will stitch together a common national market, dismantle fiscal barriers among states and consolidate a patchwork of local and central duties into a single levy.
The new tax structure will have four broad slab structure -- 5, 12, 18 and 28 percent -- along with a cess on luxury and demerit goods such as tobacco, pan masala and aerated drinks.
The states would receive provisional compensation from Centre for loss of revenue due to abolition of taxes such as VAT (value added tax), octroi and implementation of GST. The compensation would be met through levy of a 'GST Compensation Cess' on luxury items and sin goods like tobacco, for the first five years.
Services will also have these four tax slab structure. Most services, except those in the negative list of essential services such as healthcare and education, will come under GST.