sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Service Tax »
 12 ways to avoid paying more for bank services
 I-T return filing: Income Tax offices, Ayakar Seva Kendras to remain open from March 29-31
 Top 5 money matters you must settle before March 31 From income tax returns to LTCG,
 Steep fines for missing March 31 income tax deadline
 CBEC clears some air on refunds under GST, central excise, service tax laws
 3 key tax changes for senior citizens which will come into effect from April 1, 2018
 Income tax returns (ITR) filing: Not filed returns for 2 years? Beware! Deadline nearing
 All you want to know about HRA: When you can claim and how it is calculated?
 Income Tax Saving: 6 ways to save tax without investing before March 31 tax deadline
 Unnable to file your tax return? Take help of these portals
 Do you know which 80C instruments can help you save tax and carry no future tax liability?

Agree on dual goods, services tax structure
September, 17th 2009

With the deadline of April 1, 2010 for the introduction of Goods and Services Tax looming before them, States agreed on Wednesday to have two basic rates for the new tax system, including a standard rate and a lower one for essential commodities, in addition to a special rate for a small list of precious metals.

While there will also be a list of exempted items, the exact rates for the items that would be included in the GST have not been decided.

The new tax system would replace the excise duty and the service tax at the Centre and VAT and local taxes at the State level and is meant to create a common Indian market.

Sources said the standard rate is likely to be 8-9 per cent, while the lower rate for essential commodities would be 4-5 per cent and the special rate for precious metals is expected to be fixed at 1 per cent.

Despite "differences" from States such as the DMK-ruled Tamil Nadu and some BJPruled States such as Madhya Pradesh and Chhattisgarh on several issues including revenue loss, the compensation formula and sharing of the service tax base, the Empowered Group of State Finance Ministers on GST that met here also reaffirmed its commitment to the April 1, 2010 deadline.

STATUTE CHANGES

Significantly, it also decided to set up a Joint Working Group (JWG) to work out within two months a framework of the necessary amendments to the Constitution for GST implementation as well as a model GST legislation for Centre and the States.

Emerging from a meeting of the Committee, the Group's Chairman and the West Bengal Finance Minister, Mr Asim Dasgupta, said, "We don't have any time to lose.

The JWG report will submit its report to the Empowered Group as soon as possible. We are making all preparations towards that target (of introducing GST by April 1, 2010)."

Admitting that Madhya Pradesh and Tamil Nadu had raised serious reservations on many issues and had called for the intervention of the Prime Minister, he claimed that some of the problems, including those relating to whether there would be one rate or two rates, were resolved at the meeting.

The Madhya Pradesh Finance Minister, Mr Raghavji, cautioned against any haste in introducing GST, alleging that States would have reduced fiscal autonomy and claimed that Rajasthan, Haryana, Chhattisgarh, and Tamil Nadu had also expressed reservations regarding the roll-out of GST from April 1, 2010.

FLEXIBILITY FOR STATES

Mr Dasgupta, however, said "States will be given the flexibility regarding choice of goods of local importance," adding that "There is a good deal of conformity between the tax structures of the States and that of the Centre."

"There is good consensus on what is to be included. But this is a continuing process. Discussions will go on," he said. He declined to disclose the exact rates and which commodities would be excluded or included.

Mr Dasgupta added that "We have discussed in detail how the interest rate transactions take place and we have reached a convergence on that for both goods and services."

The JWG will comprise officials from the Centre and states including from the Finance ministry and other Ministries concerned in the Centre as well as the Finance Secretaries and the Commissioners of Commercial Taxes from the States, Mr Dasgupta said.

He said there was no basis for the speculation that foodgrains would be in the exempted category or attract lower tax rates. "We have to reach a consensus'' on the issue, he said.

The Empowered Group will soon discuss with the Finance Minister, Mr Pranab Mukherjee, further issues on goods and services to be covered under the GST and to find out the Centre's position vis--vis the States, Mr Dasgupta said. The GST would be a further improvement over the State-level VAT that also has two basic rates of 4 and 12.5 per cent.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Careers

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions