GST: Revenue neutral rate structure to be finalised next month
Asserting that the government is determined to implement GST from the next fiscal, Economic Affairs Secretary Shaktikanta Das on Tuesday expressed confidence that the revenue neutral rate structure will be decided the next month.
New Delhi: Asserting that the government is determined to implement GST from the next fiscal, Economic Affairs Secretary Shaktikanta Das on Tuesday expressed confidence that the revenue neutral rate structure will be decided the next month.
"The rate structure on which there is a lot of discussion going on at the moment with the GST Council and also in the public domain... Will get resolved in the next meeting of GST Council in the first week of November. Maybe, one or two sittings, it should come to a conclusion," Das said at an Assocham event here.
Dismissing criticisms, he said the rate structure has been prepared based on "a very practical basis".
"The rate has to be necessarily revenue neutral. You cannot have a rate structure where governments run into huge deficit... Therefore, GST rates are worked out in such a manner that bulk of commodities are under the standard rate, which is 18 percent," he said.
The items which are very important, which are of use to a large cross-section of people and common man are pegged at 6 per cent, he said, adding that 6 per cent, 12 per cent, 18 per cent and a higher rate for demerit goods has been proposed.
Former finance minister P Chidambaram yesterday criticised the proposed multiple-rate GST structure as "disastrous".
"We sincerely hope that we do not misinterpret the design of standard, standard minus and plus rates of GST. We can have 20 rates. It will be disastrous and that cannot be GST, it will be fooling the country," Chidambaram had said.
Emphasising that the bankruptcy law together with GST will bring in a lot of dynamism into Indian economy, Das said the government is determined to implement GST from April 1, 2017.
"Whatever preparedness is required, it is in place. The state governments are also equally committed to introducing it from April 1," he added.
Earlier this month, the Centre and states failed to decide the tax rate under the GST regime even though they "converged towards a consensus" on levying a cess in addition to the highest rate of tax on luxury and sin goods.
A four-slab tax structure of 6, 12, 18 and 26 percent with lower tariff for essential items and the highest bracket for luxury goods found favour with them, but a decision was put off to the next meeting on November 3-4.