BUSINESS

GST rates to be around 16% to 20%

Source:PTI
June 28, 2011 16:22 IST

The Central Board of Excise and Customs on Tuesday  said that tax rates under the proposed Goods and Services Tax regime in India is likely to be between 16 per cent and 20 per cent.

"World over, GST rates are typically between 16 per cent and 20 per cent. In India it is likely to be the same," CBEC chairman Sumit D Majumdar told reporters in Kolkata.

He said tax rates under the proposed GST would come down sharply and the number of assessees would rise by 5-6 times.

Although rates would come down, tax collection would go up due to increased buoyancy, he said on the sidelines of a session organised by the Bharat Chamber of Commerce.

A Constitutional Amendment Bill on GST was introduced in the Lok Sabha in the last Budget Session.

The GST would subsume most of the indirect taxes like excise duty and service tax at the central level and VAT on the state front, besides local levies.

The implementation of GST, considered to be a major tax reform, has been stuck for years due to differences between the Centre and some states over the new structure.

Majumdar said a dispute settlement authority would be set up to resolve conflicts between the Centre and states.

The CBEC chief said that the GST would be introduced any time during the next financial year.

"Since it is a transaction-based tax unlike direct tax, it is not necessary to be implemented from April 1, 2012," he said.

He said a special purpose vehicle has been set up by states, Centre and NSDL to develop a software to implement GST. The software is now being tested in 11 states.

Earlier, Finance Minister Pranab Mukherjee had said that GST would come into effect from April 1, 2012.

Initially, petroleum products and alcohol would be kept out of the purview of GST, he said.

While customs duty would be out of GST net, countervailing duty would be covered by it, Majumdar said.

Majumdar said a taskforce has been set up to frame the GST legislation. "The mandate given to the body is to keep the legislation as simple as possible."

Source: PTI
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