Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

GST (goods and services tax) advent gives Centre room for hike in excise duty

Feb 14 2013, 13:50 IST
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SummaryAlthough there are various estimates by government and independent agencies of a revenue-neutral rate for the goods and services tax, it is clear that the Centre has room to raise the excise and service tax rates in the run-up to the proposed comprehensive indirect tax likely to be ushered in from 2014-15.

Asia-Pacific region is 9.88%, while Canada and Nigeria have the lowest rate of 5%.

Another key area to be decided upon is the threshold for GST to kick in. The task force set up by the 13th Finance Commission had suggested the abolition of the current Rs 1.5-crore exemption given on levy of central excise duty and recommended applying a threshold of Rs 40 lakh for GST. It also recommended a uniform and limited list of exemptions. As per this, petroleum products and alcohol are to be subsumed in GST on which states could levy extra tax without input tax credit. Besides, the real estate sector and the entire financial services sector should also be brought under GST. It also recommended that stamp duty, purchase tax, duties on electricity as well as taxes on goods and transportation to be subsumed in GST. The list of exemptions have to be common and minimal, it said adding that education, unprocessed food and select public services could be out of GST.

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