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CEA Dr Arvind Subramanian Committee suggests GST rate of 17-18 per cent

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A key panel on GST(Goods and Services Tax) headed by the chief economic advisor Arvind Subramanian submitted its suggestions to the government. Chief economic advisor suggested a revenue-neutral rate 17-18 per cent GST rate and dropping of the one per cent additional tax on inter-state sales.


Revenue-neutral rate: To preserve current revenues that is at which there will be no loss to both state and central governments.

Key highlights:

  • CEA headed panel recommends eliminating all taxes on inter-state trade
  • Panel not to specify GST rate in Constitutional Amendment Bill
  • Revenue neutral rate of 15-15.5% for GST
  • Two options for states that is Single rate of 15% or 17-18%
  • Removal of the the 1 percent additional tax aimed to benefit the producing states like Gujarat and Tamil Nadu
  • Higher GST rates on tobacco, luxury cars, pan masala and aerated drinks
  • Alcohol, real estate out of GST to achieve 15% rate
  • The key standard rate will translate into a structure of rates, a low one of 12 percent and a high rate of 40 percent for things like luxury products

GST(Goods and Services Tax): Uniform indirect tax on manufacture, sale and consumption of goods and services throughout India, to replace taxes levied by the Central and State governments.

Introduced by: Arun Jaitly