“The reduction was based on two principles, one is to maintain the equivalence levels and other is a change in user behaviour,” Jaitley said.
Adhia’s office to be followed by GST Implementation Committee, 8 standing panels
Touted as the single-biggest taxation since independence, the GST will absorb 16 different taxes, including excise, service tax and VAT, and make India a single market for seamless movement of goods and services.
The single-biggest taxation reform since independence, the Goods and Services Tax will subsume 16 different taxes, including excise, service tax and VAT, and make India a single market for seamless movement of goods and services.
A smooth GST regime can break inter-state barriers on movement and facilitate direct linkages between processors and farmers
In the meeting, the council announced its decision of setting up a committee to look into complaints regarding anti-profiteering clause.
CGST law provides that any reduction in taxes shall be passed on to consumers
The total state levies on the basic grain purchase price — not counting the 2.5 per cent fee payable to commission agents (arhtiyas) — thus comes to 12 per cent.
The GST council has fitted the goods and services in tax bracket of 5, 12, 18 and 28 per cent. Tax experts said that a rise in tax rate for telecom and financial services is likely to hit consumers.
Luxury hotels, gambling, race-club betting and cinema services will attract a levy of 28 per cent.
GST is likely to strengthen cooperative federalism and have far-reaching implications for growth, inflation, public finances, says the RBI report.
The compensation would be met through levy of a cess called ‘GST Compensation Cess’ on luxury items and sin goods like tobacco, for the first five years.
Currently, goods attract an effective tax rate of 24-25 per cent (including both the central and state levies), while services attract a levy of 14.5 per cent.
Congress sources said that the party can consider proposals from the government on the dispute redressal mechanism.
The National Institute of Public Finance and Policy had suggested a revenue neutral rate of 27%, which was considered high by the Centre.