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30Th Aug 2016
India Inc. proposed on Tuesday that
goods fully exempted from excise duty and VAT by states be categorised as
exempted goods in the GST regime, which should be implemented after a minimum
of 6 months from the date of adoption of the GST law by the GST Council.
"Goods fully exempted from the
levy of excise duty and VAT by all the states be categorised as exempted goods
in the GST regime as well," Federation of Indian Chambers of Commerce and
Industry (FICCI) said in a release following a meeting here with the Empowered
Committee of State Finance Ministers on the Goods and Services Tax. The Total Investment
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"Goods chargeable to nil rate
of excise duty but charged to VAT in most states could be identified for
levying a merit rate of GST. All other goods (except jewellery and demerit goods)
could be subjected to the standard rate," the statement said.
"As per current indications and
reports, goods will be categorised as being subject to merit rates (12%),
standard rates (18%) and de-merit rates (40%). The Total Investment
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"Certain goods will be exempt from
GST while bullion and jewellery would be charged to 1% / 2%," FICCI added
regarding classification of goods for applying GST rates.
In this connection, the industry
chamber suggested that with a view to check inflation and check the tendency to
evade taxes "the merit rate should be lower and the standard rate should
be reasonable." The Total Investment & Insurance Solutions
On implementing GST, FICCI said that
in order to provide adequate time to trade and industry to prepare "for a
hassle free roll out of the GST regime", a minimum of 6 months time should
be permitted from the date of the adoption of the GST Law by the GST Council.
"Additional time would be
required in case the GST Law as passed by parliament or state legislatures is
significantly different from the one adopted by the GST Council," FICCI
said.
FICCI also requested the empowered
committee that certain existing exemptions such as the area based exemptions
under excise legislation and incentives under states' industrial policies
should be converted into an effective, non-discretionary tax refund mechanism.
The industry body further
recommended that valuation provisions under GST, which is a transaction based
tax, should give primacy to actual transaction value.
"Valuation provisions under the
draft GST laws are reflection of valuation laws of a single point tax like
excise duty. Wide powers have been given under the draft GST laws to
authorities to reject declared transaction value," the statement said.
In a meeting here with Revenue
Secretary Hasmukh Adhia earlier this month, Indian industry chambers had raised
concerns on the draft GST law, flagging issues like dual administrative control
and wide discretionary powers for tax authorities.
"Provisions may lead to
unwarranted disputes in future so it requested to give a re-look the law before
finalising," a FICCI representative told reporters here after the meeting.The Total Investment
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