CESSES ABOLISHED

Centre amends customs and excise law to end cesses

The Union Cabinet on Wednesday approved an amendment in the Customs and Excise Act to abolish cesses and surcharges on various goods and services to facilitate implementation of GST regime.

The Cabinet approved amendment to the Central Excise Act, 1944, repeal of the Central Excise Tariff Act, 1985 and amendment or repeal of the provisions relating to Acts under which cesses are levied. It also passed amendment to the Customs Act, 1962 and amendments to the Customs Tariff Act, 1975.

Finance minister Arun Jaitley said on Wednesday that five legislations will soon be introduced in Parliament with the objective of rolling out the comprehensive indirect tax reform GST from July 1.

“The government will bring before Parliament four GST legislations and there will be a fifth legislation as Excise and Customs Acts will have

to be amended. We will bring these legislations together to Parliament in the next few days,” he said replying to a debate on the Finance Bill.

Earlier this week Union Cabinet had approved four supporting Goods and Services Tax (GST) legislations which will now enable them to be introduced in the current budget session of the Parliament so as to roll out the new indirect tax from July 1.

The four legislations approved by Cabinet on Monday were are Central GST, Integrated GST, Union Territory GST and Compensation bill.

The GST Council has already approved fourtier tax slabs of 5, 12, 18 and 28 per cent plus an additional cess on demerit goods like luxury cars, aerated drinks and tobacco products. In April 2017 GST Council will decide which commodity and service will be taxed at what rate.

Now among the other pending agenda for the GST council is to approve four rules — composition, valuation, input tax credit and transitions. For this the next meeting of the GST has been called on March 31.

Early in the day, Mr Jaitley said that the GST will make commodities cheaper and tax evasion difficult.

Speaking at the 23rd Conference of the Commonwealth Auditor General, he said the new indirect tax regime will ensure seamless transfer of goods and services, while stronger information technology backbone will make evasion difficult.

Despite being one political entity, India currently is not a single economic entity as there are multiple layers of taxation that make goods costlier.