The Goods and Services Tax (GST), the new tax regime, would have four slabs and these were likely to be unveiled within 15 days, Chairman of the Empowered Committee of State Finance Ministers Asim Dasgupta said today.
Among the GST tax slabs, it would be zero for exempted items, one standard rate for majority of the goods and services and another having a moderate rate, he said.
Precious metals were likely to continue to attract a tax of one per cent. This had to be done to bring uniformity in tax compliance for the business community and to facilitate them to maintain only a single book of accounts for both state GST and Central GST tax payment, Dasgupta said.
The implementation of GST is scheduled for April 1, 2010. However, there are doubts among various quarters on whether the new tax regime would come into effect within the deadline, owing to difference of opinion over rates and the items to be included under GST.
| * GST tax slabs would be zero for exempted items, one standard rate for majority of the goods and services and another having a moderate rate |
| * Precious metals were likely to continue to attract a tax of 1% |
| * State levies like VAT, sales tax, entry tax etc would also be subsumed |
| * Central and state cesses and surcharges would be out once GST comes into effect |
| * GST is expected to help achieve common market for goods and services at lower tax rates, avoiding cascading effect of these taxes |
The committee had released a discussion paper on GST on November 10. It proposed to replace central levies like excise duty, service tax, special additional duty and countervailing duty by GST.
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State levies like VAT, sales tax, entry tax, etc would also be subsumed. Besides these, Central and state cesses and surcharges would be out once GST comes into effect.
Finance Minister Pranab Mukherjee had last month said: “(The) proposed GST would help achieve common market for goods and services at lower tax rates, avoiding cascading effect of these taxes.”
Dasgupta said once the law ministry cleared the draft amendments required for the GST, it would be placed before Parliament for approval.
The legislation would empower the states to levy taxes, but care should be taken that it was uniform, he said.
Dasgupta had earlier said all forms like ‘C’ form would be done away from day one of GST rollout. But, the way Bill would continue for the first year to allow the IT infrastructure for inter-state goods and services transfer to be in place.
The states released a discussion paper prepared by the Empowered Committee of their Finance Ministers last month which said GST should also replace cesses and surcharges at both Central and state levels.
The much-talked about discussion paper did not give any idea about rates and the items to be included in it.
However, it made some specific suggestions, like alcohol and petroleum tax be kept out of GST, while tobacco be included in it.
Some states like Madhya Pradesh, Gujarat and Haryana had sought extension in the GST introduction.