Removal of the 12% and 28% slabs of the Goods and Services Tax (GST) was supported, with some suggestions, by the relevant Group of Ministers (GoM) on Thursday. It now goes to the GST Council for final consideration, following up on Prime Minister Narendra Modi’s Independence Day announcement of rationalising the indirect tax regime.
Once the move is approved by the GST Council, only the 5% and 18% slabs of the existing four will remain; plus a 40% slab may be introduced for ultra-luxury goods.
The GST Council, which is led by union finance minister Nirmala Sitharaman and has ministers from all states as members, will consider the feedback, including questions on states’ share and compensation for revenue loss.
“Everyone made suggestions over the proposals made by the Centre. Some states have a few observations. This has been referred to the GST Council,” said Bihar deputy chief minister Samrat Choudhary, convener of the GoM on Compensation Cess, Health and Life Insurance, and Rate Rationalisation, constituted by the GST Council.
‘Not clear on revenue loss, compensation to states’
Another member, West Bengal health minister Chandrima Bhattacharya, told reporters, “I raised in the meeting that if the states are going to lose the revenue… then we want to know how we are going to be compensated. The GoM will now send its report to the GST Council with the notings of our concern.”
She added, “We don’t know what is the revenue loss by this GST rate cut. They have not assessed yet. In the GST Council we will get to know.”
Uttar Pradesh finance minister Suresh Khanna also told PTI, “The presentation given at the Centre did not mention how much loss is being incurred. But our point is that the common people should benefit from this.”
Announced by PM Modi on August 15 from the Red Fort, the move to eliminate the 12% and 28% brackets is part of a wider effort to simplify the tax regime and cut disputes.
Source: Hindustan Times
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