The Goods and Service Tax (GST) council which has to decide on tax rate including the levy of cess and sort out the vexed issue of jurisdiction over assesses, is all set to meet on November 3. The crucial 2-day meeting of the GST Council will be chaired by the Union Finance Minister Arun Jaitley.
Another important issue to be discussed at the meeting is the dual control of service tax assesses. Further, the meeting will have to sort out the issues regarding tax rate to enable Parliament to approve the Central GST (CGST) and Integrated GST (IGST) legislations in the winter session beginning November 16 and pave way for roll out of the new tax regime from April next year.
At the meeting, the Central government is likely to press its proposal for 4-tier tax structure of 8, 12, 18 and 26 per cent, which will mostly apply to FMCG and consumer durables. Under this structure, the items which are currently taxed between 3-9 per cent will fall in the 6 per cent bracket and those in 9-15 per cent range will come under 12 per cent rate. Moreover, the products which are currently taxed between 15-21 per cent will attract 18 per cent levy, while those above 21 per cent will be taxed at the peak rate of 26 per cent. The Centre has also planned to levy additional cess on demerit goods like tobacco, aerated drinks and polluting items to create Rs 50,000 crore fund to compensate the states for revenue loss.