State FMs to pick new chairman of GST panel in December

The Empowered Committee of State Finance Ministers will meet next month to decide on a new chairman, Delhi Deputy Chief Minister Manish Sisodia, who chaired today's meeting, said.
The states discussed the threshold limit for levying GST and setting up a new sub-committee to collect data from states to decide on the same.
"The Empowered Committee will in its next meeting in the presence of Finance Minister Arun Jaitley decide on the chairman... The meeting should happen in December," Sisodia told reporters here.
Selection of a new chairman has been necessitated by the incumbent Kerala Finance Minister K M Mani's resignation earlier this month in the wake of a High Court ruling against him in the bar bribery case.

On threshold, Sisodia said there is a "divided opinion" among states.
While the Centre is of the view that the threshold for levying central GST (C-GST) and the state GST (S-GST) be kept at an annual turnover of Rs 25 lakh, some smaller states want it to be at Rs 10 lakh.

"Some states are adamant that it should be Rs 10 lakh. Some others said it should be increased because inspector raj will increase if small traders come under GST... So, we thought that we should collect data from all states," Sisodia said.
States, he said, have two options -- raise the number of tax payers or decrease the number and levy higher taxes.

"Based on data, a decision would be taken so that it should not be on the basis of prejudice. The sub-committee would submit its report before the next meeting," Sisodia added.
Although the government had planned to roll out GST, which is billed as the most comprehensive indirect tax reform since Independence, from April 1, 2016, it looks difficult as the Constitution Amendment Bill is stuck in the Rajya Sabha where the ruling NDA does not have a majority.
With the winter session of Parliament beginning November 26, the NDA has to work out a strategy to seek Congress support for passage of the legislation.

The Empowered Committee was in Australia recently, Sisodia said, and the learning from there was to make GST simple and important for effective implementation.
Under the proposed 4-slab structure, the items which are
currently taxed between 3-9 per cent will fall in the 6 per cent bracket; those in 9-15 per cent range will come under 12 per cent rate.
Those products which are currently taxed between 15-21 per cent would attract 18 per cent levy, while those above 21 per cent would be taxed at the peak rate of 26 per cent.
The GST Council, which has Union Finance Minister and his state counterparts, will decide on tax rates next month.

Saying that the four tier rate structure was designed in a way that neither the exchequer lose revenue nor does the common man's tax liability increase significantly, Finance Minister Arun Jaitley had said: "the effort will be to fit the goods in the closest tax bracket under GST".