The proposed goods and services tax would have four rates for different classes of goods and services, and states would be given flexibility in levying extra taxes...
The proposed goods and services tax would have four rates for different classes of goods and services, and states would be given flexibility in levying extra taxes within a small band in case of items that attract the standard rate.
According to sources, there would be lower rate of GST, called merit rate, applicable on certain necessary items and goods of basic importance, a standard rate applicable on most of the items, a nil rate on certain goods and services and a special rate for precious metals.
Under the model GST under consideration for implementation, credit for central and state taxes paid on inputs can be utilised only for paying the respective taxes on the output. Cross-utilisation of central and state taxes is, however, allowed for paying any tax on inter-state supply, the IGST, sources said.
Revenue secretary Shaktikanta Das said on Monday at the conference of chief commissioners of customs and central excise that three model laws on central, state and inter-state GST needed for the tax reform would be ready by September 15. The finance ministry is also working on arriving at a suitable tax rate.
The Modi government could not get the Constitution (122nd Amendment) Bill passed in the Rajya Sabha due to opposition from the Congress, but is trying to muster support from all non-Congress Opposition members for possible voting when the current session will be reconvened by early September.
Finance minister Arun Jaitley said on Monday GST would be business friendly and would widen the tax base.