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19
May 2017
 |
G.S.T (The Total Investment & Insurance
Solutions)
The
Goods and Services Tax (GST) Council concluded its latest round of meetings on
Friday with the decision to apply the same four tax rate slabs for services as
for goods, exempting, however, healthcare and educational services from the
purview of the GST.
Speaking
to reporters here following the meeting, Kerala Finance Minister Thomas Isaac
said that no consensus could be reached on the rate to apply on gold, and that
the next meeting of the GST Council has been fixed for June 4. The Total Investment & Insurance Solutions
"We
could not come to a decision in this meeting on the rate to apply on
gold," Issac said.
"Services
will have the same four multi-slab structure of tax rates as for goods,"
he said.
The
council on Thursday approved the tax rates for 1,211 items, of which 7 per cent
will be exempted, 14 per cent will be in the 5 per cent slab, 17 per cent in
the 12 per cent category, 43 per cent in the 18 per cent segment, while 19 per
cent of goods will go into the top tax bracket of 28 per cent. The Total Investment & Insurance Solutions
"Services,
which are at currently taxed 15 per cent will be fitted into the 18 per cent
bracket. However, services will get the benefit of input tax credit for the
goods used, so real incidence of taxation will be lower than the headline
rate," Isaac added.
He
said that while "luxury services" would attract the highest rate of
28 per cent, health and education services would be exempt categories.
"Telecom
services would continue to be taxed at the same rates of the past. Not in a
single case has there been an increase in taxes from before," he
added.
Union
Finance Minister Arun Jaitley told the media here on Thursday, after the first
day of the council meeting, that "there is no increase in taxes of the
items considered today. In fact, for many of them, taxes have come
down."
An
overwhelming 81 per cent of items will attract tax of 18 per cent or below.
Only 19 per cent of items will be taxed at the highest rate of 28 per cent.
Jaitley
said that while the overall basket of taxes will see a reduction, he hoped for
greater tax buoyancy because of greater efficiency and less tax evasion.
"On
many commodities there would be reduction because of the cascading effect, but
we are banking on the hope that because of a better tax system and less evasion
there would be tax buoyancy," he said.
In
a major measure of support to industry, the rate for capital goods, as well as
industrial and intermediate items have been set at 18 per cent. The Total Investment & Insurance Solutions
Commenting
on the GST Council's deliberations, a senior tax analyst said the rates
announced were along expected lines. The Total
Investment & Insurance Solutions
"However,
it seems a lot of work is yet to be done. Exemptions and issues related to
reverse charge mechanism have not been finalised, and looks doubtful that it
will be done in a day," said Taxmann.com Senior Consultant V.S Datey. The Total Investment & Insurance Solutions
"Thus
the chances of introducing GST by July 1 appears doubtful," he added.
"Companies
would now quickly want to compute/re-compute the impact of rate change, if any,
on their products and consequential change in their related margins,"
Partner in international accounting firm KPMG in India Harpreet Singh said in a
statement here.The Total Investment & Insurance
Solutions
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