New Delhi: As we all coming close to the rollout of GST starting July 1, Finance Minister Arun Jaitley said there would be no “surprises” in fixing the tax rates under the ‘one nation one tax’ regime.
He added that there will be no significant difference in the rates from the ones that are currently in place. However, it will drastically reduce the number of taxes levied currently by the government.
FM also called upon companies, asking them to pass on to the consumers all the benefits of the tax reduction under the GST which will eliminate all redundant taxes in circulation currently.
Now finalizing the tax rates that got approval a few days ago are left; the GST Council, headed by FM, is scheduled to meet in Srinagar to determine the rates on the different goods and services after unifying at least 10 taxes into the GST.
While addressing at CII’s Annual Meeting, he said rules and regulations governing GST have all been framed. “We are now in final stages of fixing tariffs for different commodities. “The formula under which it is being done has also been explained and therefore nobody is going to be taken by surprise, it’s not going to be very significantly different (from present),” he added.
Four rate categories of 5, 12, 18 and 28 per cent have been finalized by the GST Council after unifying levies like central excise, service tax and VAT.
Fitment will be done by adding the total incidence of current taxation (central plus state levies) and then putting the good or service in the tax bracket closest to it.
FM said the GST Council has so far had 13 meetings and has never had to resort to voting to decide on any issue.
“And therefore all states representing different political complexions, have all agreed (on GST structure),” he said.
The Finance Minister said the Council is of the opinion that any benefit accruing from lower tax rates under GST should be passed on to consumers.
He also said “Profit is not a bad word… but unfair enrichment is. And therefore the benefit of reduction in taxation is a benefit that consumers are entitled to. And that’s not a principle that can be seriously contested.
The GST laws approved by Parliament have incorporated an anti-profiteering provision to ensure that the reduction of tax incidence is passed on to the consumers.