In order to ensure smooth roll out of Goods and Services Tax (GST), Revenue Secretary Hasmukh Adhia has began meeting various stakeholders including representatives of telecom, banking and oil and gas sectors to understand their concerns and fine tune the new tax regime.
As many as 10 sessions would be conducted over three days and the outcome of these would help the government to fine tune and improve the structure of the GST, a finance ministry statement said.
Adhia, along with senior officers of Central Board of Excise and Customs (CBEC), met representatives of IT-ITeS and transport sector yesterday and e-commerce and telecom sector today.
The finance ministry officials would meet the representatives of sectors like financial services, civil aviation, exporters and professional bodies like chartered accountants and cost accountants, in addition to industry chambers.
"The interactive session underline the endeavour of the government in order to understand and address the apprehensions and concerns of the various stakeholders about GST and also provide a platform for business to express their views on aspects of GST," the statement said.
Once implemented, the GST will subsume excise, service tax and other local levies, will create one market for seamless transfer of goods and services across the country.
The GST Constitutional Amendment Bill was passed by Parliament earlier this month and so far three states -- Assam, Bihar, Jharkhand-- have ratified the bill.
GST being a constitution amendment has to be ratified by at least 16 state assemblies before being placed before the President for his approval.
After the bill is ratified by the the states, Parliament will have to pass two legislations-- CGST and IGST -- detailing the new tax code. This could happen in the winter session of Parliament in November. Similar tax laws will also have to be passed by the states.
The government plans to roll out GST from April 1, 2017.
The GST Council is likely to arrive at the final rate
structure tomorrow and on the next day would discuss who will tax the 11 lakh service tax assessees.
"The principles of fixing the rate would be; it should be inflation neutral, states and centre continue with their expenditure and tax payers are not burdened," Jaitley said.
Once the rate structure is finalised, the technical group of state and central tax officers will discuss which item would fall in which tax bracket.
"So far between the last two meetings and today, we have been one by one reaching a consensus on each issue and so far all decision have been taken by a consensus. And the object is to keep on discussing and re-discussing even when there are no agreement on the first instance and take as many decision possible by consensus and to the extent possible avoid a situation where we have to put an issue to vote. So far we have achieved that objective," he said.
Explaining the rate structure proposed by the Centre, Revenue Secretary Hasmukh Adhia said that the lower rate is proposed at 6 per cent, standard rates at 12 per cent and 18 per cent and a higher rate of 26 per cent. Demerit goods such as tobacco, cigarettes, aerated drinks, luxury car and polluting items would attract cess over and above the 26 per cent rate.
Adhia said taxation of services would however be only in the 6 per cent, 12 per cent and 18 per cent with the higher rate at 18 per cent.
The rate of cess would be different for different items, Adhia said, adding that the amount collected from cess would go into a separate Rs 50,000 crore pool which would be used to compensate the states for revenue loss.
He said less than 10 per cent of the taxable goods would fall in the 6 per cent bracket. 70 per cent of the taxable base would come in 6, 12, 18 per cent tax bracket, while 25 per cent of the tax base will come into the 26 per cent category.
FMCG and consumer durable products would attract 26 per cent GST rate, against the current incidence of around 31 per cent.
