New Delhi, March 18, 2017
They also said the rates would not be inflationary because foodgrains are likely to be exempted
There will not be many changes in the goods and services tax (GST) rates compared to what’s prevailing in the current indirect taxation regime, according to officials.
They also said the rates would not be inflationary because foodgrains are likely to be exempted.
The next big thing in the GST regime will be rules and the item-wise rate structure.
“We don’t want to make many changes in rates for goods under the new GST rate structure,” an official said.
Another official said there would be a smooth landing for industry with respect to the rates. He said the fitment of items in the GST rates would be done to ensure that the consumer price index (CPI) did not spike.
“We will do calculations to see to it that rates don’t lead to consumer price inflation,” he said. The GST Council, an official said, would decide if cesses over the peak rate of 28 per cent should continue after five years. All other cesses will be subsumed in the GST.
The official said the Centre would lose some revenue due to the abolition of cesses.
Hotels will attract an 18 per cent rate, while those with a turnover of up to Rs 50 lakh will attract five per cent.
The Council has approved four tax slabs — five per cent, 12 per cent, 18 per cent and 28 per cent — and cess over the peak rate. On Thursday, the Council approved caps on cesses, which would range from 15 per cent in the case of luxury cars and aerated drinks to 290 per cent in the case of cigarettes.
However, the actual cesses will be lower and at the rate that will ensure that the aggregate tax incidence is equal to the one under the current taxation regime.
The GST Council will next take up rules at its meeting on March 31. After that, a committee of officers will start an exercise of fixing item-wise rates.
[The Business Standard]