New Delhi: The government is hopeful of getting the GST Constitution Amendment Bill passed in the Lok Sabha next week, paving the way for implementation of the new indirect tax regime from April 2016.
“We are hopeful of getting the GST Bill passed next week,” a top government official said.
The GST Constitution Amendment Bill was introduced in Lok Sabha in December and is likely to be taken up for consideration and passage by the House on Tuesday.
Sources said the Revenue Neutral Rate (RNR) of 27 per cent as proposed by a sub-panel was way too high and needs to be worked.
RNR is the rate at which there will be no revenue loss to the states after GST implementation.
The re-calculation of RNR is necessary as the present rate does not take into account the taxation of petroleum products as also the 1 per cent additional tax which states can levy as part of the GST Bill.
“The GST rate at 27 per cent is outlandish. A final decision on the rate will be taken by the GST Council in June or July,” another official said.
The GST Council will have the Union Finance Minister Arun Jaitley as its Chairman and comprise two-third of its members from states and one-third from the Centre.
The Centre is working towards addressing concerns of all states for rolling out the GST on the scheduled date.
“Almost there is a consensus with all states,” the source added.
Once implemented, GST will be the biggest tax reform since 1947. A single rate GST will replace central excise, state VAT, entertainment tax, octroi, entry tax, luxury tax and purchase tax on goods and services to ensure seamless transfer of goods and services.
Jaitley had last week said in the Lok Sabha that “GST is going to lead to a win-win situation as far as the Centre and states are concerned. It is going to up India’s GDP. It is going to up India’s revenue.”
Seeking to assuage fears of states that they will lose out on revenues once GST is implemented, he said the Centre and states will have concurrent power to levy tax on goods and services.