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.
- 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