GST Rate Likely To Be Over 12 Percent (04-Mar-2010)
The Finance Ministry stated that the proposed Goods and Services Tax rate is expected to be higher than 12%.
It was suggested by the task force set up by the 13 Finance Commission.
The Finance Commission had suggested a total GST rate of 12% but is expected to be higher than that.
This was said by the Revenue Secretary Sunil Mitra said at a CII seminar here.
However, he clarified that he was not talking about the Central GST but the combined tax at the Union and state governments'' level.
The task force had suggested a 5% GST rate at the Central level and 7% at the state level.
Previously, GST was scheduled to be implemented from April 1 2010, but now the Central GST will replace most of the indirect taxes at central and states levels like service tax, excise duty, VAT, and local levies.
Earlier, the state finance ministers have informed the parliament that the Goods and Services Tax (GST), which will replace most of the indirect taxes at the central and the state levels, cannot be implemented from April this year as a future possibility.
When Rajya Sabha asked the finanace minister, Mr.Pranab Mukherjee whether the Chairman of the Empowered Committee of the State Finance Minister has expressed the opinion that it was not feasible to implement GST from April 1, 2010, Mr.Mukherjee in reply said yes to Rajya Sabha
In January, the Central government has favoured keeping alcohol and petroleum products under the purview of Goods and Services Tax (GST), with rejecting a recommendation made by the Empowered Committee of State Finance Ministers.
The Centre has rejected the proposal given by states that alcoholic beverages may be kept out of the purview of proposed Goods and Services Tax (GST) system. The Revenue Department has taken a standpoint that alcoholic beverages should be brought under the purview of GST and that the State excise duty can be charged over and above GST.
Value Added Tax (VAT) and state excise duty can be charged on alcoholic products over and above GST, the finance ministry said.
However, the Ministry agreed with the committee to subject tobacco products to GST with input tax credit. The Centre can levy excise duty on tobacco products over and above GST without input tax credit.
Besides, the Centre has also declined the States'' proposed move to take on a two-rate structure. The Revenue Department has said that there should be one CGST rate both for goods as well as services.
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