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All decisions on GST to be taken by consensus among states: Meghwal
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 particular proposal, he added.
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 particular 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 common consensus.”
A significant decision keeping in mind that this landmark tax reform has been in the making since the last one decade, and it is consensus that has eluded the states and the centre, so far.
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 indirect tax.
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 money collected by the central government through the cess will be used to compensate states. The GST Council has, however, not taken a final decision on the issue.
“We have a formula for revenue neutral rate, and discussions around rates or 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 decision will also be taken by the GST council,” Meghwal said.
The finance ministry has set a deadline of November 22 for resolving all concerns regarding the new tax.
