Congress States Seek Full GST Revamp

Congress States Seek Full GST Revamp

Highest tax rate should be 18% and petroleum should be part of new tax regime, say state govts ahead of GST Council meet

A day ahead of the GST Council meeting here, Congress-ruled states have sought a complete overhaul of the indirect tax regime with the highest slab at 18% instead of 28%.Congress-ruled states have written to union finance minister Arun Jaitley demanding “nothing less than a complete overhaul of GST structure.“

“The highest rate should not be more than 18%,“ said Karnataka minister Krishna Byre Gowda who is a member of the GST Council, said on Thursday.The government may not be averse to the revamp.“The key agenda to be taken up is revamp of the 28% slab and the composition scheme for businesses as well as restaurants,“ said Bihar finance minister and deputy chief minister Sushil Modi.“Most of the issues will be addressed.“

“The Congress is in favour of inclusion of petroleum into GST,“ Punjab finance minister Manpreet Singh Badal said at a press conference called by Assam Pradesh Congress Committee. Kerala finance minister Thomas Issac however is not in favour of including petroleum and real es tate in GST till the time new tax regime settles down.

Gowda said Congress had earlier said the GST rate should not be more than 18% but the government still went ahead and raised the slab.“There are many luxury and sin goods which would be taxed at a higher rate and under that premi se, a rate of 28% was agreed upon by the council. But we find that a lot of items of mass consumption are also in the 28% slab,“ he said.

Many materials used for building a house such as tiles, bricks, cement, sanitary ware and taps are in the 28% slab and it is proving to be a burden for individuals building their homes, he said.

“A builder is different because the builder gets input tax refund whereas a common person does not get any refund. So it is proving to be a costly affair and there is no justification in keeping construction materials in the 28% tax slab,“ he said. Barring real goods of luxury or of sin nature, GST slab should be brought down to 18%, he said.

“That has been our general position for a while. So we hope there will be a positive and a resultoriented discussion on this issue tomorrow. Over time, 12% and 18 % slabs should converge and only a few items should remain in the 28% slab,“ he said.Puducherry chief minister V Narayanasamy said that handicrafts should be exempted from GST and compliances should be reduced.

He claimed Congress-ruled states had been demanding a re vamp in the GST structure, but the Centre never paid any attention and was now taking steps in view of the assembly elections in Gujarat.The GST Council is likely to review items in the 28% slab, some of which could be moved to 18% and 12% slab. It is also expected to simplify compliances for small and medium enterprises as well as large businesses.

GST, a single tax that subsumed as many as 43 taxes and cesses, was rolled out on July 1. The government has been since trying to address hiccups through periodic GST Council meetings.

Sops Likely for Digital Payments

Guwahati: The GST Council may consider incentives for digital payments in the GST framework to give a push to the digital payments system.The incentives could be in the form of credit or exemptions.The council will take a decision based on the revenue implications of the proposal.

The Economic Times, New Delhi, 10th November 2017

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