The Goods and Services Tax (GST) will have few tax rate slabs beside a standard rate but only for a transition period before India gradually moves to a pure single tax rate regime, Minister of State for Finance Arjun Ram Meghwal said on Sunday.
Slabs are necessary to protect manufacturing sector in the very low tax brackets, Meghwal added. “There will be slabs in the tax rate beside a standard rate. Some sectors like Bikaneri Papad where tax is just one per cent… these industries will die if a single standard rate is applied,” the minister said here highlighting benefits of GST at an event here.
“At the time when we are pushing for ‘Make In India’, we cannot afford to impact any manufacturing sector. Manufacturers should ‘not’ fear that indirect taxes will go up in a major way,” he asserted.
At an interactive session organised by the Calcutta Chamber of Commerce, Meghwal added that there would be several changes in the GST before it is passed and also said that the West Bengal government should pass it in the state Assembly.
“When Bengal chief minister Mamata Banerjee had come to Delhi she had said that they were in support of the GST. Their people had accordingly supported it in the Lok Sabha and the Rajya Sabha but in the recently concluded two-day session of the Assembly here, I was told that the GST discussion was dropped from the agenda owing to paucity of time. The consumer and manufacturers’ groups should put pressure on the government here to pass it in the Assembly,” Meghwal said.
Responding to a suggestion by an industry representative that the threshold limit of Rs 10 lakh as turnover should be raised Meghwal said that the threshold limit would definitely be changed. “We had kept it as Rs 10 lakh in public domain for public reaction. We want to increase it but the states are not agreeing because they think it will bring down their income. There will be a meeting of the states on September 22 or 23, where this thing will be discussed. I think the profit of a company, assuming it to be 10 per cent of the turnover, should be equal to the limit of tax exemption which a government employee gets,” he added. With PTI