With New GST, Here’s How Different Items Could Be Taxed: 10 Points

Categories: GST Recent News
No Comments

images (11

  1. Finance Minister Arun Jaitley is meeting with his counterpart from each state – together they make up the decision-making GST Council.
  2. The GST does away with levies charged when goods cross state line and unifies India into a single market.
  3. The centre has suggested four tax slabs, with the lowest at 6 per cent and the highest at 26 per cent, which would apply to about a fourth of taxable items.
  4. The slabs proposed are: 6, 12, 18 and 26 per cent. Food items should be exempt to keep inflation in control, the centre has suggested. FMCG and consumer durable products would be taxed at 26 per cent, against 31 per cent currently.
  5. For luxury goods like fancy cars, cigarettes and soft drinks, an additional cess over the 26 per cent rate has been mooted, resulting in pushback from states. Kerala’s Finance Minister Thomas Issac said the new cess violates the basic spirit of the GST – which is to have one uniform tax.
  6. The goods and services that fall into this new cess category account for a fourth of all taxable items. FMCG and consumer durable products would attract 26 per cent GST rate, against the current incidence of around 31 per cent.
  7. The centre has agreed to compensate states for five years, for the revenue they will lose when GST subsumes their levies. The extent of compensation remains a contentious issue and is being considered by the GST Council, whose three-day session ends tomorrow.
  8. Some states have also objected to the fact that 11 lakh businesses that currently pay service tax will continue to be assessed by the centre rather than them, which they say is unfair and eats into their power. The centre says that over time, officials in states will be trained to take over.
  9. The centre wants to reach consensus at this meeting so that it can present the agreed upon tax rate and scope to parliament which meets next month.
  10. The main opposition Congress had earlier threatened to veto the GST if a rate higher than 18 per cent is proposed by the government. The Congress’ support for the proposal is important in the Rajya Sabha or Upper House, where the government is in a minority.

Read more at: http://www.ndtv.com/india-news/with-new-gst-heres-how-different-items-could-be-taxed-10-points-1476169