GST Update: “Exemption List” to entail not more than 100 items

GST STOCK

The Centre and states GST council are likely to curtail the Exemption list and not include more than 100 items under Exempted list.

A slew of requests have been received by the GST council to slot a particular list of products in the exempted list or lower GST rate slab. These requests have been received from various associations or companies.

In order to ensure an effective taxation system, the GST council is also expected to include services which are subject to differential taxation. Hotels, for example is a type of service which is slotted in different slabs depending on the final billing amount.

What we must understand, however, is that firms or products which will be exempted will not have the discretion to adjust Input GST against Output GST. In case of exemptions, products or firms which will actually earn some benefit due to the exemption shall be mentioned in the list.

In the current scheme of things, 299 items have been exempted from the Centre and 99 items have been exempted at the state level. Some items from the current list are going to prevail in the proposed list of exemptions in the GST.

“It (exemption list) is near finalisation, ultimately, it will be a political call,” said a government official.

GST is a massive conglomeration of various state and Central taxes. The new tax regime will subsume taxes like VAT, CST, Excise, etc. This will make the taxation process in India more streamlined and seamless. Not only this, GST will reduce the tax burden on the Aam Aadmi. Additionally, it will also regulate tax invasion and eliminate cascading effect of taxes.

India has adopted a four-tier tax structure of 5%, 12%, 18% and 28%. The highest tax slab which is the cap tax rate is 40%. There is no tax slab higher than this. The most prevalent tax rate will be 18%. GST rollout is due on July 1, 2017, just as Finance Minister Arun Jaitley had promised.

 

 

 

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