State to push for same benefits under GST for VAT exempted goods
The state government will urge the GST council that goods exempted from VAT be extended the same benefit under the new goods and services tax (GST) regime, when it comes into force from July 1. “There are certain goods that have been exempted from VAT.
Amaravati: The state government will urge the GST council that goods exempted from VAT be extended the same benefit under the new goods and services tax (GST) regime, when it comes into force from July 1. “There are certain goods that have been exempted from VAT. We will make a plea to the GST council that the same exemption be continued even under GST,” finance minister Yanamala Ramakrishnudu told reporters here on Tuesday.
Highlights:
- Finance minister Yanamala says he will make a plea to GST Council
- Says Centre owes Rs 600 crore as VAT compensation
The GST council, headed by Union finance minister Arun Jaitley, would meet in Srinagar on May 18 and 19 to finalise the tax rate structure and also the commodities.“So far the tax rates and also the commodities for different tax structures have not been finalised. It was broadly decided to have five rates – 0, 5, 12, 18 and 28 per cent – with luxury goods attracting the highest tax.
Tobacco products, high-end cars, soft drinks and coal may attract 28 per cent tax under GST. Otherwise, there will be no burden on the common man,” Yanamala said. Hitherto, India had a complicated tax structure with too many taxes and too many tiers. GST will eliminate all that and ensure uniform taxation and open up a single market. “It will have a very positive impact and in the long-term our revenues will increase,
” the finance minister said. Referring to the proposed Cess Fund to compensate states that stood to lose revenues under GST, the minister said 2015-16 would be taken as the base year. “We actually wanted the Centre to compensate states from the Consolidated Fund of India and not impose any cess. But ultimately, the GST Council decided to go for a Cess Fund,” he added. Yanamala said the Centre still owed Rs 600 crore to state as VAT compensation.
“We may lose revenue of Rs 2,000 crore, when GST is implemented and the Centre has to compensate us,” he added. The state Legislature would specially meet this month end or in the first week of May to pass the state GST Bill. “Once the President gives his assent to the GST Bills passed by Parliament and they are published in the Gazette, we will convene a special session and pass the state GST Bill,” the minister said.
