Friday, January 16, 2015

GST: Biggest Tax Reform gets rolling

Creating A Single National Market
  • Uniform rate in the country, but a narrow band may be allowed
  • Central levies, including excise and services, to be subsumed
  • State VAT, Sales Tax, Central Sales Tax, Entertainment Tax and Octroi to be replaced
  • GST to be destination-based tax; consuming state to get tax
  • States to be compensated fully for the first three years of roll out
  • Compensation to be reduced in the fourth and fifth years
  • GST council to decide on changes in GST
  • Council to include Union and state finance ministers

Area-based Excise sops to continue under GST

The adoption of the Goods and Services Tax (GST) won't lead to untimely withdrawal of the
excise waivers for industries in Jammu and Kashmir, North-eastern states, Uttara khand and
Himachal Pradesh. These sops would continue in some form or the other under the GST regime.

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