All decisions on GST will be by consensus, says Meghwal
ONE TAX, MANY VIEWS But finance ministry not adamant about any particular proposal
NEW DELHI: The government has decided to resolve all GST-related issues by consensus even as it sticks to its April 1 2017 deadline, minister of state for finance and corporate affairs Arjun Ram Meghwal told HT on Wednesday. While there are several issues to be ironed out before the indirect tax reform is implemented, the finance ministry is not adamant about any proposal, he added.
“We are firm about our GST implementation deadline of April 1, 2017, but in the run-up to that date, all decisions will be taken based on consensus.”
The sixth meeting of the GST Council will begin on Thursday. The agenda includes discussions on GST slabs, compensation to states, tax rates and the mechanism through which the Centre will compensate states for any revenue loss in the initial years of the implementation of the tax regime. GST council is the highest decision-making body for GST. It is headed by the union finance minister and has all state finance ministers as members.
The Centre has so far proposed a four-tier GST structure with two standard rates of 12% and 18%. Food items and other necessities would be taxed at 6%, while luxury products would be taxed at 26%. Ultra-luxury items, including tobacco goods and environmentally harmful products, will attract a separate cess. The Centre will use the money collected through the cess to compensate states for revenue losses, if any. The GST Council is yet to take a decision on the issue.
“We have a formula for revenue neutral rate, and discussions around slabs are being worked on this formula. We want certain goods like agricultural products to be outside GST, for some the rate has to be nominal, otherwise it might have an impact on inflation. Keeping these in mind we need slabs. All these decisions will also be taken by the GST Council,” Meghwal said.
The finance ministry has set a deadline of November 22 for resolving all issues regarding the new tax regime.