Govt looking for new calculations in GST

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Govt looking for new calculations in GST :

New Delhi :  Ahead of the crucial Goods and Services Tax ( GST ) Council meeting on September 20, the finance ministry has begun calculations of numbers to estimate the revenue it would lose in the event of rate reductions aimed at boosting demand during the festive season.

The fitment panel that examines rate changes is expected to meet shortly to consider suggestions mooted by some states as well as industry, two officials aware of the development told Media. The panel comprises central and state officials.

Among big-ticket consumer items, automobiles, tyres, cement, air conditioners and large LCD televisions are currently in the 28% bracket. Automobiles also bear a cess, depending on the size of the vehicle, further increasing the total tax incidence.

“Issues are being examined in detail… Numbers are also being looked at,” said one of the officials. Some states have already written to the Centre highlighting the need to cut rates on autos and cement to provide a boost to the economy. Some state policymakers are of the view that a more radical view of the rate structure needs to be taken, for instance merging the 12% and 18% slabs into one.

The key issue before the council meeting in Goa will be a possible cut in the tax incidence on automobiles, though there are differences among states on this issue. Punjab has suggested a comprehensive look at the rate structure while reducing levies for sectors such as automobiles to help turn the economy around. But Kerala is opposed to any such move.

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