Congress-ruled states call for wider GST ambit, rate cuts

GST Revised Rates of 66 Items list

Members of the Goods and Services Tax (GST) Council from Congress party-ruled states said on Thursday they will propose to the council to launch discussions on introducing major changes to the new indirect tax system, including bringing into its fold items left out earlier such as electricity, land and select hydrocarbons.

Cutting short the list of items in the highest tax slab of 28% is also a key demand.

Punjab finance minister Manpreet Singh Badal told reporters in Guwahati that all Congress party-ruled states are unanimous that tax rates have to be rationalised, glitches in the IT system supporting GST have to be fixed and discussions on inclusion of real estate, electricity and select hydrocarbons in GST have to be started.

“There is a need to look at bringing real estate sector within GST while balancing the needs of autonomy of states to levy stamp duty and property taxes and also keeping agricultural lands and old buildings outside the GST,” said Badal.

The minister said that exclusion of electricity, crude oil, petrol, diesel, jet fuel, natural gas and real estate out of GST means that about half of total indirect tax revenue will be out of GST. “If you have to make GST work then level of taxation has to decrease and compliance has to go up,” said the minister.

Capping the maximum GST rate at 18% was a key demand of the Congress party when the bill to amend Constitution for facilitating GST introduction was discussed in Rajya Sabha in 2016.

Karnataka agriculture minister Krishna Byre Gowda said eventually the 12% and 18% slabs should converge and that only a few items should remain in the 28% slab.

Gowda said that barring goods of luxury or sin, other items in the top tax slab have to be brought down to 18%. “We hope there will be a positive and result oriented discussion on that issue on Friday,” said the minister.

Tax experts said that while the council has been addressing implementation issues, there is a need for resolving them in a comprehensive manner. R. Muralidharan, senior director, Deloitte India, said the council needs to review the list of goods in 28% slab and bring some of the deserving items to 18% besides changing the return period to quarterly from monthly till the GSTN system stabilizes.

Source: http://www.livemint.com/Politics/w1VVbMqnMRGXJOjLpnkaqK/Congressruled-states-call-for-wider-GST-ambit-rate-cuts.html

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