Allaying apprehension of spike in prices of goods and commodities after the roll out of the GST, Finance Minister Arun Jaitley today said the tax rates will be kept at the current levels so as not to have any inflationary impact. Introducing four bills to give effect to the Goods and Services Tax (GST), Jaitley said the legislations will have to be passed by Parliament and one by each of the state assemblies to turn India into one market with a single tax rate.
The Finance Minister said the aim of the GST Council is to decide everything relating to the tax structure with consensus and this is for the first time that such an arrangement has been made, based on the principle of shared sovereignty of both the Centre and the state governments. The bills are the Central Goods and Services Tax Bill, 2017, the Integrated Goods and Services Tax Bill, 2017, the Goods and Services Tax (Compensation to States) Bill, 2017 and the Union Territory Goods and Services Tax Bill, 2017. Explaining the bills, he said the Central GST or CGST will give powers to the Centre to levy tax after levies of excise, service tax and additional customs duty is subsumed. The Integrated GST or IGST will be a tax to be levied by the Centre on inter-state movement of goods and services.
The Finance Minister also explained about various tax slabs under the GST. The GST Council has already approved four-tier tax slabs of 5, 12, 18 and 28 per cent plus an additional cess on demerit goods like luxury cars, aerated drinks and tobacco products. The work on putting various goods and services in the different slabs is slated to begin next month. The Compensation Law provides for levy of cess on top of the peak rate of approved tax (28 per cent presently) on paan masala, tobacco, aerated waters, luxury cars and coal to create a non-lapsable fund for compensating states.