To gauge the states’ temper forward of the Goods and Services Tax (GST) Council’s assembly in late May, the GST Council secretariat has sought states’ views on the scope for elevating tax charges on 143 gadgets, usually to revert the speed to twenty-eight% from 18%.
“The opinions of the states have been sought on raising the GST rates on 143 items. After getting a sense of the opinion of states, the proposals may be put up before the GST Council,” a state finance minister informed FE.
In December 2018, the GST Council slashed the tax charges on numerous gadgets, together with client durables, digital items and furnishings gadgets, from 28% to 18%. These embody some televisions, water coolers, ice cream freezers, milk coolers, meals grinders, paints, digital cameras, video digicam recorders and online game consoles and sports activities requisites. In November 2017, the charges on candies and different meals preparations containing cocoa have been lowered from 28% to 18%.
Separately, recommendations by a gaggle of ministers led by Karnataka chief minister Basavaraj Bommai on GST charge rationalisation will possible be prepared quickly after taking inputs from states. The GST Council could take into account these proposals within the third week of May.
Caught between the conflicting goals of boosting income receipts and controlling runaway inflation, the Centre could make a pitch for calibrated hikes within the GST charges over the subsequent couple of years, moderately than a one-time trimming of the slabs from 4 at current to a few, based on sources.
The states are involved a few attainable drop of their tax revenues after June, when a five-year income cowl for them will stop to exist. The street map for GST charge hikes will possible consider the necessity to take the weighted common GST charge from somewhat over 11% at current to the estimated income neurtal charge of 15-15.5% over a two-three yr interval, however gained’t give a shock to the customers by the use of sharp enhance in charges.
Currently, there are 4 foremost GST slabs: 5%, 12%, 18% and 28%. About 70% of the GST revenues come from over 480 gadgets which are a magnet for 18% GST.
There is a view within the Centre that gadgets below the 12% and 18% slabs needs to be shifted to a brand new median slab of 15%.
Kerala finance minister KN Balagopal, a member of the GoM, informed FE lately: “We have identified 25 items, including refrigerators, where benefits of GST rate reductions have not been passed on to consumers by the companies. These rate cuts should now be reversed.”
Source: www.financialexpress.com”