Fourteen state legislatures will approve their respective State Goods and Services Tax (SGST) laws by mid-May, according to Revenue Secretary Hasmukh Adhia.
Addressing a GST Conclave here on Tuesday, he said all states were expected to pass their SGST laws by May-end to ensure that the GST regime was rolled out by July.
Bihar and Telangana had already passed the SGST laws while Rajasthan was likely to approve the bill on Wednesday.
Mr. Adhia said the new regime would not have any inflationary impact on the economy since the country would be shifting away from the multiple-level taxes that had a cascading effect. The GST regime would also aid in easing inflation.
Allaying fears that consumers would have to pay more for goods and services under the GST regime due to an increase in tax rates, Mr. Adhia said the prices of most items would decrease while those of services might stay at the same level.
“Around 60% of the income of the Centre and States comes from items that attract 12.5% excise duty and 14% value added tax. There will be a likely reduction in tax on these items under GST,” he said.
Also, though a majority of the services would see service tax rising to 18% under the GST regime from the current 15%, most services would get the benefit of input tax credit on purchases and, therefore, the overall tax incidence wouldstay the same, he said.
However, there could be a marginal increase in tax for some services, Mr. Adhia added.
Essential items
All foodgrains and absolute essential items for people were likely to be exempted from GST, the official said. Therefore, GST would not have an inflationary impact. Mr Adhia, however, said the GST Council would take a call on it.
The GST Council’s next meeting is scheduled for May 18-19 and is expected to discuss fitment of commodities in the four-tier tax structure under GST.
Under GST, every registered person would be assigned a compliance rating on the basis of the record of compliance in respect of specified parameters. The ratings would be made public.
A prospective client would be able to see a supplier’s rating and decide whether to deal with the supplier or not, said Prakash Kumar,CEO, GST Network (which provides IT infrastructure and services for implementation of GST).
Mr. Kumar said it would help in healthy competition among taxable persons.
Addressing a GST Conclave here on Tuesday, he said all states were expected to pass their SGST laws by May-end to ensure that the GST regime was rolled out by July.
Bihar and Telangana had already passed the SGST laws while Rajasthan was likely to approve the bill on Wednesday.
Mr. Adhia said the new regime would not have any inflationary impact on the economy since the country would be shifting away from the multiple-level taxes that had a cascading effect. The GST regime would also aid in easing inflation.
Allaying fears that consumers would have to pay more for goods and services under the GST regime due to an increase in tax rates, Mr. Adhia said the prices of most items would decrease while those of services might stay at the same level.
“Around 60% of the income of the Centre and States comes from items that attract 12.5% excise duty and 14% value added tax. There will be a likely reduction in tax on these items under GST,” he said.
Also, though a majority of the services would see service tax rising to 18% under the GST regime from the current 15%, most services would get the benefit of input tax credit on purchases and, therefore, the overall tax incidence wouldstay the same, he said.
However, there could be a marginal increase in tax for some services, Mr. Adhia added.
Essential items
All foodgrains and absolute essential items for people were likely to be exempted from GST, the official said. Therefore, GST would not have an inflationary impact. Mr Adhia, however, said the GST Council would take a call on it.
The GST Council’s next meeting is scheduled for May 18-19 and is expected to discuss fitment of commodities in the four-tier tax structure under GST.
Under GST, every registered person would be assigned a compliance rating on the basis of the record of compliance in respect of specified parameters. The ratings would be made public.
A prospective client would be able to see a supplier’s rating and decide whether to deal with the supplier or not, said Prakash Kumar,CEO, GST Network (which provides IT infrastructure and services for implementation of GST).
Mr. Kumar said it would help in healthy competition among taxable persons.
Source : The Hindu