From very long, GST (The Goods and service tax) has been hovering over the minds of consumers of the country. Undoubtedly, GST is a content form of different taxes scattered all over the goods and service market. From July 1, GST will be active in the Indian markets.
Apart from this, the authorities have decided to put a cap on the sin tax which is cess on the demerit goods. The sin tax will be up to 15%, which will indirectly serve to the states which are facing a depletion in income due to GST.
The finance minister, Arun Jaitley assured that the sin tax will be implied on just 5 demerit commodities.
In the recent conference held, Finance ministry concluded that, “We have kept a headroom of about 3% for imposing the cess on demerit goods”. The cess will be arranged in such a way that, it will not affect the final taxable amount crossing the limits of set tax rates.
The commodities like tobacco, pan masala, luxury cars and aerated beverages will be affected by the 15% cess on GST.
Although the tax experts have agreed upon the cap of 15% on GST, they have also decided to keep it limited to few hazardous goods. Government is yet to decide on the exemptions which are based on areas like Uttarakhand. But, the exemptions will not be able to continue for long.
Other than CGST, IGST, UGST and compensation law, SGST will need approval from the state assemblies. The five rules like payment, registration, refunds, invoices and returns have been approved by the finance ministry and the remaining four like transition, composition, input tax credit and valuation will be considered in coming session.
Apart from this, the ministry had asked for a zero rating of supplied goods to Special Economic Zones.
Krishan Arora of Grant Thornton India LLP mentioned, “It would also be critical for the government to immediately release the approved GST draft Bills along with relevant rules, rate schedules, etc for the industry to adequately assess the final impact of GST and align its business operations for a smooth and timely transition”.
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