Skip to main content

GST Council Adopts Concept Paper Discouraging Tinkering with Rates

By
GST Council Adopts Concept Paper Discouraging Tinkering with Rates
Paper says no manufactured goods should be given outright exemption as it would hit Make in India
The Goods and Services Tax (GST) Council will actively discourage any further tweaks in rates, following a major revamp of the indirect tax regime on Friday to help small industries and exporters.A concept paper adopted by the council says no manufactured goods should be given outright exemption as this would hinder the Make in India initiative. States should opt for direct subsidy transfers if they want to reduce tax incidence on any item. This suggests that companies looking for such breaks like Apple would not be able to get any outright tax exemptions.
“The whole idea is to look at the issue of rate revision afresh... There should be no ad hocism in rate revision,“ said a government official familiar with the thinking behind the concept paper that will guide changes to tax rates from now on.The key principles in the concept paper include one that manufactured goods should not be placed in the nil bracket as it would then face nil customs duty , impacting the domestic manufacturing adversely.
“As a rule no manufactured good shall be exempt from GST,“ according to the paper, which was approved by the council on Friday. ET has seen a copy of the paper.On Friday , the council raised the composition scheme threshold to Rs 1 crore from Rs 75 lakh, allowed smaller businesses with a turnover of up to Rs 1.5 crore to pay tax and file returns quarterly instead of monthly and exempted exporters from payment of tax under various promotion schemes among other decisions. The changes in GST, which was rolled out nationally on July 1, were made in re sponse to industry feedback.
Any revision will also be carried out keeping in view that there is no blockage of input tax credit or the creation of an inverted duty structure in which input is higher than the finished product, the officials said.Further, changes in tax rates will be considered after a period of at least three months, allowing them to settle in first.The concept paper stated that the GST rate of 28% should be reviewed after three months based on the criteria that have been decided. Goods that yield high revenue, luxury goods and sin goods will not be considered for revision despite being in the highest rate bracket. Revision could be considered for goods of mass consumption or public interest; intermediate goods that are used in business-to-business supplies; goods manufactured by small and medium enterprises; and export-related items.
Tax experts said this will keep the tax structure stable.
“Frequent and ad hoc changes in GST rates are definitely not desirable... This mechanism would ensure that some general guidelines are followed for deciding the rates in future, while making an exception if needed,“ said Pratik Jain, leader, indirect taxes, PwC. Jain hopes that many items in the 28% slab will move to the lower bracket of 18%.
“Benefits of GST can only be realised if rates are moderate,“ Jain said.The council had decided on fitment of goods based on the principle of equivalence--tax incidence prior to launch of GST. GST has four rate slabs--5, 12%, 18% and 28%. There have been changes in a number of goods after the roll out based on representations received from the industry. The council moved more than two dozen items to lower slabs on Friday.
The Economic Times, New Delhi, 09th October 2017

Comments

Post a Comment

Popular posts from this blog

Data storage norm splits digital payments industry

By
Data storage norm splits digital payments industry  India’s nascent digital payment industry could be thrown into disarray due to the demand by the Reserve Bank of India (RBI) that all user data be stored within the country, fears an industry grouping, which has termed the decision as “heavy-handed”, even as others, including the country’s largest digital payment provider Paytm, have hailed the move.  In a bid to narrow the growing schism, the industry is planning to send a formal representation to the regulator highlighting its concerns, a top official told ET.  “We are trying to build a consensus on the issue," said the person adding that the representation to the central bank will be ready this week.  RBI on April 6, mandated all payment companies—global and local—to set up data storage facilities within India by October. The stringent six-month deadline has attracted the ire of several sections of the industry that fear it will lead to a disruption of wel...
18 comments
Read more

Offer’s for all of you

By
Great Bumper Dhamaka Offer’s for all of you... It's Time to see your Business Online, WebeCreator Offer Website Designing with domain & Email @ nominal charges. For a year For More information visit us http://goo.gl/KlpppF call on 9890151261/9773197533  drop a mail to sales@webecreator.com
Post a Comment
Read more

Sebi to finalise options in commodities today

By
The Commodity Derivatives Advisory Committee of the Securities and Exchange Board of India ( Sebi) will meet on Friday with senior officials of the latter, to give a final shape to the rules on options trading in commodity futures, beside revising the warehousing norms to ensure good delivery on settlement. The decision taken, after discussing with the advisory committee, will be placed before the regulator’s board, to finalise the regulations. According to knowledgeable sources, three commodities in each segment, agricultural and non- agricultural, have been proposed for introducing options. It appears commodities from the soya and guar segments are preferred in the former. From the non- agri segment, it is likely that gold, silver and crude oil will be finalised. All these These have better liquidity and both the National Commodity and Derivatives Exchange and the Multi Commodity Exchange, respectively, will be able to introduce the options. In the equity segments, options ar...
17 comments
Read more