After getting the Rajya Sabha approval the efforts are being made to roll out Goods and Services Tax (GST) from April 1, 2017 and the government has said that it will not impact on inflation even if the rate is kept at 20 percent. Finance Secretary Ashok Lavasa said that all efforts will be made with cooperation of every one to meet the deadline of April, 2017 and there is no such threat. States and the Centre will take a call on rates that will take into account all issues, including the concern related to inflation.
The Finance Secretary said the GST regime would bring more compliance, which would mean more transactions falling into the tax net. Further he said that it will bring more efficiency and better prospects for growth. Besides, Chief Economic Advisor Subramanian said that even if the GST rate is 18-20 percent, there would be no average impact on inflation. Whereas, the Constitutional Amendment Bill did not have the GST rate and the GST Council, which will have representation from both the Centre and states, will now work out a rate. The subsequent legislations Central GST (CGST) and Integrated GST (IGST) are likely to come up for discussions in the next Winter session of Parliament, would mention the GST rate.
The Rajya Sabha has approved the GST bill to replace a raft of different state and local taxes with a single unified value added tax system to turn the country into world's biggest single market. Earlier a panel headed by Subramanian had suggested 17-18 per cent 'standard' rate for bulk of goods and services, while recommending 12 per cent for 'low rate goods' and 40 per cent for demerit goods like luxury car, aerated beverages, pan masala and tobacco. For precious metal, it recommended a range of 2-6 per cent.