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GST may have multiple rates initially, no RNR too: Hasmukh Adhia

The goods and services tax (GST) may have multiple rates on the lines of some European countries and a revenue neutral rate will not be possible initially, Revenue Secretary Hasmukh Adhia said here today.

By: | Ahmedabad | Updated: September 17, 2016 11:38 PM
Adhia, however, said the final decision on this will be taken by the just-constituted GST Council comprising the Union finance minister and state finance ministers. (Source: Reuters)

The goods and services tax (GST) may have multiple rates on the lines of some European countries and a revenue neutral rate will not be possible initially, Revenue Secretary Hasmukh Adhia said here today.
The uniform indirect tax is expected to be rolled out from April next year.

Adhia, however, said the final decision on this will be taken by the just-constituted GST Council comprising the Union finance minister and state finance ministers.

“Instead of a single GST rate, there are multiple GST rates in some European countries. We too may have to begin with multiple rates and this is required to protect the poor and the middle class,” Adhia reasoned, adding that a revenue neutral rate (RNR) will not be possible initially.

Addressing the Gujarat Chamber of Commerce and Industry here, he further said the rate structure will be such that “the overall burden of tax will come down in most commodities. But a final decision on this will be taken by the GST Council”.

He expressed optimism that the proposed tax regime will be effective next fiscal year and the GST software will be ready for testing by January 1.

“The IT network being created for the Centre and the states is being monitored, and by January 1, the GST software will be ready for testing wherein we will do live testing of return filings, and by April 1, we will complete the entire process of rolling out GST,” Adhia asserted.

He said the state finance ministers will meet on September 22 and 23 in New Delhi to discuss the pending issues on GST such as tax structure, exemption limits and the like.

Adhia also said the exemption limit for GST is being raised to Rs 25 lakh, from Rs 10 lakh as proposed earlier, and most states are on board.

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