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  3. GST regime to be between 16-20%: CBEC

GST regime to be between 16-20%: CBEC

28 Jun 2011 Evaluate

The Goods and Services Tax (GST) regime is expected to be between 16-20% in India. The Central Board of Excise and Customs (CBEC) Chairman Sumit D Majumdar said 'World over, GST rates are typically between 16% and 20%. In India it is likely to be the same.”

S D Majumdar said tax rates under the proposed GST would come down sharply and the number of assesses would rise by 5-6 times. Although rates would come down, tax collection would go up due to increased buoyancy, he said on the sidelines of a session organized by the Bharat Chamber of Commerce.

In the last budget session, a constitutional amendment bill on GST was introduced in Lok Sabha. The GST would include most of the indirect taxes like excises duty and service tax at the central level and Value Added Tax (VAT) on the state level, besides local taxes. The execution of GST is considered to be a major tax reform, and has been stuck for many years due to differences between central and state government on the new structure of GST.
 
CBEC chairman said a dispute settlement authority would be set up to resolve conflicts between the Centre and states, by adding further, he said that the GST would be introduced any time during the next financial year. 'Since it is a transaction-based tax unlike direct tax, it is not necessary to be implemented from April 1, 2012. A special purpose vehicle has been set up by states, Centre and NSDL to develop software to implement GST. The software is now being tested in 11 states. Initially, petroleum products and alcohol would be kept out of the purview of GST, Majumdar said.

While customs duty would be out of GST net, countervailing duty would be covered by it, CBEC chairman said. A taskforce has been set up to frame the GST legislation. 'The mandate given to the body is to keep the legislation as simple as possible,' he added.

Earlier, finance minister Pranab Mukherjee had said that GST would come into effect from April 1, 2012.

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