9911796707
TMI BlogAPPROVAL OF GST RATES BY COUNCILX X X X Extracts X X X X X X X X Extracts X X X X ..... APPROVAL OF GST RATES BY COUNCIL - By: - Dr. Sanjiv Agarwal - Goods and Services Tax - GST - Dated:- 10-11-2016 - - The GST Council in its fourth sitting on 3-4 November, 2016 zeroed in at the GST rates with consensus amongst all the states and the centre. The tax rates have been set in a four slab tax structure of 5 percent, 12 percent, 18 percent and 28 percent with lower rates for essentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l items and higher rates for luxury and demerit goods. Such items may also attract an additional cess to create a corpus for funding requirements for any revenue loss to be compensated by the centre to the States, if such a situation arises. In fact, there will be seven rates of taxes as follows: 0% Exempted goods 5% Neces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sary / daily use goods 12% Standard rate I 18% Standard rate II 28% Peak rate for luxury goods / demerit goods ?? On gold / jewellery ?? Cess on luxury goods, tobacco etc So far as standard rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is concerned, it is proposed that there will be two standard rates of 12% and 18%. What will be the fate of services is not known. Simply putting all services in 18% slab shall result in overall inflation impact as all services will become costly by three percent straight. It may be a good idea to have two baskets of tax rates for services. Certain essential services may be placed under 12% and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... others in 18% slab. Services like health care, life insurance, coaching etc. deserve to be either exempt or at best be under 5% slab. Multi rate structure will bring in classification issues leading to tax disputes and hence, the litigation. It is hoped that about 50 percent of the good in consumer price index basket and items of mass consumption shall be exempt or zero rated which will essenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally include food grains. On the other end, top of bracket of 28% and of course, cess, shall be levied on luxury goods and cars / tobacco products. Such goods which suffer a higher tax will hardly be beneficial to consumers or tax payers. The 5% tax rate will be on items of common use. Most of the other items will be subject to 12% and 18% tax which still will be lower than the existing tax imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act (central excise plus service tax). The overall tax rate structure may lead to inflation as services shall become costlier unless the Government decides to put them in 12% bracket, which is unlikely. Having more than one rate for services will also complicate GST tax structure. The proposed rate structure may result in operational cost reduction, efficiency gain, lower logistics cost but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... higher level compliances in smaller companies and particularly unorganized sector. Cross empowerment / dual control The GST Council could not arrive at any decision on dual control of Centre, as well as States over assessees (cross empowerment model) whereby both will use scrutiny and audit powers in respect of assesses. Forthcoming Agenda In view of the developments, the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing action points have been finalized Meeting scheduled for 9-10 November has been called off which was supposed to discuss draft legislation All State Finance Ministers shall meet informally on 20 November, 2016 to discuss and iron out the differences / issues Formal GST Council meeting will be held on 24-25 th November, 2016 to approve remaining issues of control and draft legisl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. GST Bill may be taken up by Parliament in winter session between 16 November and 16 December, 2016. Secretary level team shall identify the goods and services for the purpose of tax slabs in which they will be placed. The developments in next few days will give direction and pace for implementation of GST. - - Scholarly articles for knowledge sharing authors experts professio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
