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GST: Govt panel for removing tax on inter-state trade

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New Delhi: To achieve a middle path on the long due Goods & Services Tax (GST) bill, a government panel headed by Chief Economic Adviser Arvind Subramanian suggested the one per cent additional origin tax for manufacturing states recommended to be levied on the GST, specifically on the inter-state trade of goods to help manufacturing states. This is one of the foremost demands of the Congress and the suggestion might help the BJP-led NDA Government to crack this gridlock in Parliament.

In a report submitted to Finance Minister Arun Jaitley on Friday by the authorised committee recommended changes on the main GST rate to be in the range of 16.9-18.9 percent. The rates endorsed a revenue-neutral rate (RNR) of 15-15.5 percent, with an average rate of 17-18 per cent, should be levied on majority goods and services.

The average rate will be implemented on majority goods and services in the new indirect tax regime. These tariffs were deliberate after eliminating real estate, electricity, alcohol and petroleum products.

The demands put forth by Congress’ comprise 18% GST rate to be legislative and doing away with 1% additional origin tax for manufacturing states- Gujarat, Maharashtra and Tamil Nadu. They had also demanded an independent dispute resolving body for GST.

“The idea of not putting rate caps (of 18% as suggested by Congress) in the Constitution is pragmatic, considering the dynamic business environment which may demand future changes in the GST rate. Recommendation towards wider coverage of sectors (including petroleum) within GST is much desirable in the interest of a cleaner indirect tax regime,” said Rajeev Dimri, leader, indirect tax, BMR & Associates LLP, to a newspaper.

The Constitution Amendment Bill, prevalently recognized as the GST bill, is pending approval in the Rajya Sabha due lack of the majority of the leading government. The government is nonetheless working towards negotiating and finalizing the work by March 31 next year to enable GST’s roll out from April 1, 2016.

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Finance Minister Appeals To Insist On Bill For Every Purchase

the government would start a three-digit consumer helpline number

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Finance Minister Appeals To Insist On Bill For Every Purchase
Finance Minister Appeals To Insist On Bill For Every Purchase. Flickr

Seeking consumers’ participation in curbing tax evasion, Finance Minister Piyush Goyal on the eve of completion of one year of GST rollout on Saturday appealed to them to insist on bill for every purchase saying it would help the government check evasion and reduce tax rate on each item by as much as 4-5 per cent. He further said the government would start a three-digit consumer helpline number to enable them to lodge complaint against erring traders or any other kind of tax evasion.

Touted as the biggest indirect tax reform since Independence, the Goods and Services Tax (GST) was rolled out last year on July 1. “I want to appeal to the people that they should demand a bill whenever they go to purchase any goods. If you start asking for a bill…if there’s awareness about this, then we can reduce rates by 4-5 per cent for every item (under GST),” Goyal told reporters here.

He said if any shop says that they will sell at a lower price if the consumer does not demand a bill, then the consumer should immediately file a complaint, he said. “We will soon provide a three-digit simple number which will work as a call centre where customers can complain. We will ensure full confidentiality of the complainant,” Goyal said. The endeavour will be to start the helpline number within 15-20 days, he said. A nationwide campaign too could be launched for creating consumer awareness about demanding bills for purchases made. “If everyone starts giving bill then competition will be on quality and customer service and not on ability to cheat the system,” Goyal said. He further said the government wants to reduce the burden of taxation on consumers but revenue needs to increase and support of states is also needed to cut rates where it is essential.

bills
bills owing. Flickr

With formalisation of economy, the government will have more elbow room to reduce rates, he said.

Also read: Out of Total Tax Fine of $15 billion, Apple Pays $1.77 billion to Irish Government

Goyal also assured small businesses if they face any trouble, then they can write to him and it would be resolved. He said amendments would be introduced to the GST law in monsoon session to increase composition scheme threshold from the current Rs 1 crore. The GST Council had last year decided to increase the threshold to Rs 1.5 crore and also decided to amend the law to increase the statutory threshold to Rs 2 crore. (IANS)

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