GST: Rates will have no Inflatory Impact, says Jaitley

GST Rates - Arun Jaitely - Taxscan

Allaying apprehension of spike in prices of goods and commodities under, Finance Minister the new indirect tax regime, GST, Arun Jaitley today said the tax rates will be kept at the current levels so as not to have any inflationary impact.

Introducing four bills to give effect to the Goods and Services Tax (GST), Jaitley said the legislations will have to be passed by Parliament and one by each of the state assemblies to turn India into one market with a single tax rate.

The Minister said the aim of the GST Council is to introduce a uniform tax structure with consensus and this is for the first time that such an arrangement has been made, based on the principle of shared sovereignty of both the Centre and the state governments.

The Lok Sabha passed the Central Goods and Services Tax Bill, 2017, the Integrated Goods and Services Tax Bill, 2017, the Goods and Services Tax (Compensation to States) Bill, 2017 and the Union Territory Goods and Services Tax Bill, 2017. The Finance Minister Jaitley addressed the House.

“These are revolutionary bills which will benefit all….States have pooled in their sovereignty into the GST council, and Centre has done the same,” he said.

Explaining the bills, he said the Central GST or CGST will give powers to the Centre to levy tax after levies of excise, service tax and additional customs duty is subsumed.

The Integrated GST or IGST will be a tax to be levied by the Centre on inter-state movement of goods and services.

The States will pass the State GST or SGST law that will allow them to levy sales tax after levies like VAT are subsumed.

The Compensation Law provides for levy of cess on top of the peak rate of approved tax (28 per cent presently) on pan masala, tobacco, aerated waters, luxury cars and coal to create a non-lapsable fund for compensating states.

The fourth law introduced is on Union Territory GST or UTGST for UTs like Chandigarh and Daman and Diu which do not have assemblies.

Jaitley said all decisions on GST would be taken by the GST Council, reflecting the federal structure.

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