GST Rates | Govt May Come Up With New Exemptions, Under GST

gst rates
The government has reiterated that it is open to continuing some existing exemptions or providing new ones to specific regions under the Goods and Services Tax (GST) regime.

Exemptions per se should not continue but the ones that the state governments have committed to may be treated differently, said Najib Shah, chairman of Central Board of Excise and Customs (CBEC), at a panel discussion on GST in New Delhi on Wednesday. All options, including grandfathering and budgetary route, are under discussion and it’s something the GST council will have to decide, he said.

Read All About GST from Beginning

A grandfather clause or policy is an old rule that continues in some situations while a new one applies to all future cases. The GST Council had in its second meeting approved region-specific exemptions.

The government has decided in September that all industries that get exemptions by state governments will pay tax under the GST regime, which respective states will reimburse later.

The GST Council, the nodal authority comprising the Union Finance Minister and representatives from all the states and Union Territories will meet on Thursday to discuss the State GST and Union Territories GST Bills.

The government is working simultaneously on GST rules and tax rates for individual items, said Upender Gupta, commissioner, GST, (CBEC), at the discussion.

Once the draft laws are cleared by the GST Council and then Parliament and state assemblies, the rules will be made public, and then rates will be decided, said Upender Gupta, commissioner, GST, (CBEC), he said. The laws include central, state, Union Territory and integrated GST and the compensation law.

Shah said he would not be able comment on whether rates on each commodity will be decided before the ongoing Budget session of Parliament ending April 9.

In November last year, the GST Council had announced a four-tier rate structure —5 percent, 12 percent, 18 percent and 28 percent. In its last meeting on March 4, the council had approved the central and integrated GST bills.

Bloomberg Quint, 15 March 2017

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