The State Government is looking comfortable with 18 per cent Goods and Services Tax (GST) in Jharkhand under the new tax regime which is going to replace the incumbent system from April 1 next year. The proposal would be pushed in the GST Council meeting that is the apex body to finalise uniformity in commercial taxes across the country during the implementation process.
Sources in the Commercial Tax Department said that the rate would be suitable for the State considering its socio-economic conditions. “The matter had also been discussed in the Assembly and the Government is of view that the new tax regime is not inflationary in nature as well as prospecting for business. In that sense we should be comfortable with 17-18 per cent rate of the GST,” said a top official.
The crucial three-day meeting of the GST Council has started on Tuesday in Delhi to decide on the tax rate and sort out issues like compensation formula for rolling out the new indirect tax regime coming in place from April, 2017. Senior Minister CP Singh is there to attend the meeting which is going to deliberate upon the important issues to be presented before the Finance Ministry before November 22 with wider consensus.
last year, a panel headed by Chief Economic Advisor Arvind Subramanian had suggested 17-18 per cent as the standard rate for bulk of goods and services while recommending 12 per cent for low rate goods and 40 per cent for demerit ones like luxury car, aerated beverages, pan masala and tobacco. For precious metal, it recommended a range of 2-6 per cent. Also, Union Finance Minister Arun Jaitley had batted for heightened rate for environmentally-unsound products.
Informing about the meeting, Secretary in-charge of the Commercial Tax Department Satyendra Singh said the GST Council meeting would deliberate for consensus. “It is the panel of Finance Ministers from all the States and the Union Territories. It is quite obvious that they would reach upon any uniformity about the tax rate, which is going to be more or less uniform across the country. Agreed rate of GST would be arrived at on the last day of the meeting,” said the official.
Talking about future course of action, Minister Saryu Roy nevertheless termed the rate-fixation lesser important thing. “Fixing rate is not a big deal. For Jharkhand it is more important to create sustainable network for GST regime, which would need several issues to be resolved first,” said the Minister who had introduced the Bill in the Assembly to get it ratified.
At its previous meeting in September, the GST Council had finalised area-based exemptions with special considerations for North-East and hilly regions. Consensus is also expected over the issue of the Centre retaining power to assess service tax filers under the new dispensation and also over Integrated GST (IGST) besides the Central GST.
The agreed rates and related legislations are expected to be placed during the upcoming Winter Session of Parliament scheduled in November. While states would be free to determine their own rate over State-GST which can be levied upon certain goods. In any case all the states would be compensated if the revenue under GST regime falls short of the average tax earnings in the best three years out of the past five years.