Congress chief ministers and finance ministers are expected to press for an 18% GST (goods and services tax) cap at the meeting of the three-day GST council beginning 17 October and stress that a higher rate would burden the common man.
The party leadership has written to the chief ministers and finance ministers, asking them to firmly reiterate the capping of the GST rate at 18% in the upcoming meeting.
Congress rationale is that a higher rate will burden the common man and will defeat the very purpose of GST to create a common market and reduce the burden on both—producer and consumer.
The GST council, headed by finance minister Arun Jaitley, at its first meeting last week, had decided to keep traders with annual revenue of Rs.20 lakh out of the new national sales tax regime that will subsume all cesses.The exemption limit for north-eastern and hill states has been fixed at Rs.10 lakh.
The council also agreed on the contentious issues of revenue threshold—below which traders will be exempted from GST, and sharing of administrative powers. The all crucial GST rates will be decided in the meeting. It was also decided that the state authorities would have jurisdiction over assesses with annual turn over of less than Rs.1.5 crore. The traders with annual turn over of over Rs.1.5 crore would be subject to cross examination either by officers from the Centre or state to avoid dual control.
Congress in its note to chief ministers insisted that the constitutional amendment on GST was only passed after the government and the party negotiated and reached an agreement on principal demands of Congress. The main demands were abolition of 1% surcharge, compensation to states for revenue loss for 5 years, establishment of a dispute redressal mechanism and legal ring fencing of consolidated cap on GST rate.
“It was agreed that the rate will be reflected in the GST law that will be recommended by the GST council. It is important that the government honours the same,” the party said.
Also the council shall as per constitutional mandate establish a mechanism to resolve disputes that may arise from the implementation of GST law between the Centre and states or between states, it hoped.