Jaitley promises no surprises in new GST rate fixation

Finance Minister Arun Jaitley on Friday promised not to spring any surprises in fixing tax rates under the new GST regime but asked India Inc to pass on benefit of reduced taxes to consumers and not profiteer. He also sounded a note of caution on growing tendency of protectionism in nations around the world, saying the jury is still out if such moves would make the global economy more efficient or sluggish. Comments by Jaitley at CII annual conference came against the backdrop of fears of global trade and investment being impacted by increasing protectionism in nations like the US, which has tightened visa regime and is insisting on using American products. To the domestic industry, Jaitley asked them to pass on to consumers the benefit of reduction in taxes under Goods and Services Tax (GST) which will eliminate the current compounding effect of different central and state levies.

The GST Council, headed by Jaitley and comprising representatives of all the states, is scheduled to meet in Srinagar on May 18-19 to finalise tax rates on different goods and services after unifying at least 10 indirect taxes into the GST.

He said rules and regulations governing GST have been framed and fixing of tariffs for different commodities is in "final stages." "The formula under which it is being done has also been explained and therefore nobody is going to be taken by surprise, it's not going to be very significantly different (from present)," he said.

The GST Council has finalised four rate categories of 5 per cent, 12 per cent, 18 per cent and 28 per cent after unifying levies like central excise, service tax and VAT. Fitment will be done by adding the total incidence of current taxation (central plus state levies) and then putting the goods or services in the tax bracket closest to it.