In a meeting held at New Delhi, the GST Council has proposed to raise the peak tax rate to 20 per cent form the current 14 percent in the model Goods and Services Tax Bill. The current move is to avoid the requirement of approaching Parliament for any change in rates in future. The council is headed by Finance Minister Arun Jaitley and comprising representatives of all states.
Reportedly, the change inin the peak rate will not alter the 4-slab rate structure of 5, 12, 18 and 28 per cent agreed upon last year, but is only a provision being built into the model law to take care of contingencies in future, two officials in the know told PTI.
The Council, in November, had published the draft model of GST in which the maximum rate of tax was 14 percent.
“There shall be levied a tax called the central/state goods and services tax (CGST/SGST) on all intra-state supplies of goods and/or services… at such rates as may be notified by the central/state government… but not exceeding 14 per cent on the recommendation of the Council and collected in such manner as may be prescribed,” the draft law states.
Officials said this “14 per cent” will now be changed to say the rate will not exceed “20 per cent”.
