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Panel discusses GST rate; reaches consensus on compensation

A four-slab structure of 6%, 12%, 18% and 26%with a cess on the highest band for ultra luxury and demerit items like tobacco was discussed

Press Trust of India  |  New Delhi 

GST prompts a change in business model

The Council today discussed possible Goods and Service Tax rates, including a four-slab structure of 6, 12, 18 and 26 per cent with lower rates for essential items and highest band for luxury goods, even as it reached consensus on payment of compensation to states.

The all-powerful panel, headed by Finance Minister and includes representatives of all states, reached a consensus on the way states would be compensated for any loss of revenue from implementation of the new indirect tax regime from April 1, 2017.



for calculating the revenue of a state would be 2015-16 and secular growth rate of 14 per cent would be taken for calculating the likely revenue of each state in the first five years of implementation of GST, Jaitley told reporters here.

States getting lower revenue than this would be compensated by the Centre.

The Council on the first day of its three-day meeting discussed five alternatives of rate structure, he said, adding no decision was taken and discussions would continue tomorrow.

A four-slab structure of 6, 12, 18 and 26 per cent with a cess on the highest band for ultra luxury and demerit items like tobacco being levied was discussed.

Food items are proposed to be exempt from the tax and 50 per cent of the items of common usage will be exempt to keep the inflation under check. The lower rates would be levied on essential items and the highest for luxury and demerit goods.

The cess would help create a compensation fund to help compensate states for any loss of revenue from implementation of the new indirect tax regime that will subsume a host of central and state taxes including excise duty, service tax and VAT.

Kerala Finance Minister Thomas Issac said his state government wanted the highest rate to be fixed at 30 per cent so that common man items can either be exempt or levied with lower tax rates.

The compensation to states would be "limited to taxes subsumed into GST," he said.

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Panel discusses GST rate; reaches consensus on compensation

A four-slab structure of 6%, 12%, 18% and 26%with a cess on the highest band for ultra luxury and demerit items like tobacco was discussed

A four-slab structure of 6%, 12%, 18% and 26%with a cess on the highest band for ultra luxury and demerit items like tobacco was discussed The Council today discussed possible Goods and Service Tax rates, including a four-slab structure of 6, 12, 18 and 26 per cent with lower rates for essential items and highest band for luxury goods, even as it reached consensus on payment of compensation to states.

The all-powerful panel, headed by Finance Minister and includes representatives of all states, reached a consensus on the way states would be compensated for any loss of revenue from implementation of the new indirect tax regime from April 1, 2017.

for calculating the revenue of a state would be 2015-16 and secular growth rate of 14 per cent would be taken for calculating the likely revenue of each state in the first five years of implementation of GST, Jaitley told reporters here.

States getting lower revenue than this would be compensated by the Centre.

The Council on the first day of its three-day meeting discussed five alternatives of rate structure, he said, adding no decision was taken and discussions would continue tomorrow.

A four-slab structure of 6, 12, 18 and 26 per cent with a cess on the highest band for ultra luxury and demerit items like tobacco being levied was discussed.

Food items are proposed to be exempt from the tax and 50 per cent of the items of common usage will be exempt to keep the inflation under check. The lower rates would be levied on essential items and the highest for luxury and demerit goods.

The cess would help create a compensation fund to help compensate states for any loss of revenue from implementation of the new indirect tax regime that will subsume a host of central and state taxes including excise duty, service tax and VAT.

Kerala Finance Minister Thomas Issac said his state government wanted the highest rate to be fixed at 30 per cent so that common man items can either be exempt or levied with lower tax rates.

The compensation to states would be "limited to taxes subsumed into GST," he said.
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Business Standard
177 22

Panel discusses GST rate; reaches consensus on compensation

A four-slab structure of 6%, 12%, 18% and 26%with a cess on the highest band for ultra luxury and demerit items like tobacco was discussed

The Council today discussed possible Goods and Service Tax rates, including a four-slab structure of 6, 12, 18 and 26 per cent with lower rates for essential items and highest band for luxury goods, even as it reached consensus on payment of compensation to states.

The all-powerful panel, headed by Finance Minister and includes representatives of all states, reached a consensus on the way states would be compensated for any loss of revenue from implementation of the new indirect tax regime from April 1, 2017.

for calculating the revenue of a state would be 2015-16 and secular growth rate of 14 per cent would be taken for calculating the likely revenue of each state in the first five years of implementation of GST, Jaitley told reporters here.

States getting lower revenue than this would be compensated by the Centre.

The Council on the first day of its three-day meeting discussed five alternatives of rate structure, he said, adding no decision was taken and discussions would continue tomorrow.

A four-slab structure of 6, 12, 18 and 26 per cent with a cess on the highest band for ultra luxury and demerit items like tobacco being levied was discussed.

Food items are proposed to be exempt from the tax and 50 per cent of the items of common usage will be exempt to keep the inflation under check. The lower rates would be levied on essential items and the highest for luxury and demerit goods.

The cess would help create a compensation fund to help compensate states for any loss of revenue from implementation of the new indirect tax regime that will subsume a host of central and state taxes including excise duty, service tax and VAT.

Kerala Finance Minister Thomas Issac said his state government wanted the highest rate to be fixed at 30 per cent so that common man items can either be exempt or levied with lower tax rates.

The compensation to states would be "limited to taxes subsumed into GST," he said.

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Business Standard
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