17th April 2017
India can have new indirect tax regime this year.GST will be tested so that tax structure does not get any more complicated. This is after having opted for multiple rates under the upcoming GST regime. There can be some products which can attract same tax rates.
The concept will be more simplifies when there will be a Single rate for one product group this will make implementation easier. In this one segment could lead to unnecessary disputes and litigation. It is expected that GST will roll out on July 1.
Normally GST has four-tier tax slabs 5%, 12%, 18% and 28%.18 % is one of the commonly applicable rates. The highest rate is expected to be pegged in the GST law at 40%.
GST council will take decision on the highly anticipated tax reform which is expected to lift economic growth by 1-2 % points this will be done by removing inter-state barriers thus slashing cost and boosting efficiency.
ONE GOOD, MULTIPLE RATES
Present tax regime has VAT structure in states as also the central excise structure is laden with divergences in rates within a particular category. The divergence exists in terms of value even within the same HSN code (Harmonised System of Nomenclature). There are some biscuits, footwear, electric lamps, spectacles have differential rates within one HSN code under central excise.
Bakery products (Pastries, Sweet Biscuits, and Cakes) levies 6% on excise duty, but the product containing chocolate or having a chocolate coating it is 12.5%.In the case of packaged biscuits in which retail price not exceeding Rs 100 per kg are not levied under any tax. Leather footwear attracts 6% whereas may vary till 12.5%. There value-based rate in addition as well – nil for retail prices of up to Rs 500 and 6% for Rs 500 to Rs 1,000. Similar there are certain products such as lamps, mobiles and spectacles frames.
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