GST Council meeting in Srinagar today to fix rates on goods, serviceshttps://indianexpress.com/article/business/economy/14th-meeting-in-srinagar-gst-council-meet-from-today-to-fix-rates-on-goods-services-4661267/

GST Council meeting in Srinagar today to fix rates on goods, services

GST council: On Wednesday, a technical committee of officials met in Srinagar before the start of the meeting to evolve a broad consensus on the fitment of the items in the tax slabs.

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GST council: Currently, there are 17 items in the negative list of services on which service tax is not levied.

In what could be the last meeting before the rollout of the indirect tax regime, the Goods and Services Tax (GST) Council will meet for the fourteenth time on Thursday and Friday in Srinagar to decide fitment of various goods and services in the multi-tier tax structure of 5, 12, 18, 28 per cent, with additional cess over and above 28 per cent for demerit and luxury goods.

On Wednesday, a technical committee of officials met in Srinagar before the start of the meeting to evolve a broad consensus on the fitment of the items in the tax slabs. Tax slabs have been decided for about 80 per cent of items, though decision regarding contentious items like motor vehicles, beedi, coconut oil will be taken up for discussion in the Council’s meeting, an official said. Services are likely to be placed in two slabs of 12 per cent and 18 per cent, with a likely status quo for currently exempted services.

Currently, there are 17 items in the negative list of services on which service tax is not levied. On top of that there are over 60 services, like religious pilgrimage, healthcare, education, skill development, journalistic activities, which are exempt from service tax.

Along with the fitment of items in the tax slabs, representatives from 31 states and union territories and Centre will converge to discuss the draft GST rules pertaining to accounts and records, advance ruling, appeals and revision, assessment and audit and e-way bill that have been already placed in public domain. Also, the Council is expected to give final approval to four sets of rules relating to input tax credit, valuation, transitional provisions and composition scheme, which were tentatively approved in the last meeting on March 31.

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Finance Minister Arun Jaitley has reiterated that tax rates for most items will be closest to their existing tax incidence, a combination of central and state levies. The tax rates will also be decided keeping in mind their impact on inflation.

A timely consensus on fitment of items in tax slabs will be crucial for the government’s targeted implementation deadline of July 1 for GST, touted as the country’s biggest indirect tax reform since Independence. GST, a destination-based tax, will subsume 16 current levies, including seven central taxes like excise duty and service tax and nine state taxes like VAT and entertainment tax.

The GST Council had decided on the tax slabs last year, with another “zero tax rate” on several items that approximately constitute half of the consumer price index basket including foodgrains. Cess will be imposed on these products in addition to GST to raise resources for paying compensation to states for any revenue loss suffered during five years after GST implementation.

The government has decided to impose a cess on luxury and other goods with a cap of 15 per cent. The maximum cess on pan masala has been capped at 135 per cent and for tobacco it is capped at 290 per cent or Rs 4,170 per 1000 sticks. The environment cess has been capped at Rs 400 per tonne.

Jaitley had earlier this month expressed confidence of the GST Council arriving at tax rates in the May 18-19 meeting. Around 1,000 security personnel will be pressed into service for sanitising the conference venue and the hotels where the officials will stay during the conference.