GST snippets

In a clear step forward for launching GST by April 1, 2010, the empowered group of state finance ministers reached a consensus on having a two-tier unified rate on goods and service tax (GST). The duty structure would include a standard rate and a lower rate for essential commodities. The GST will replace all existing taxes like excise, service tax and other local duties. The empowered group meeting was attended by state finance ministers and officials of the Union finance ministry. The state finance ministers agreed to have a “special rate’’ for a small list of precious metals and a list of exempted items. Dasgupta said there will be a “conformity’’ in rates between the Centre and states. It has already been decided that there will be a dual model of GST —separate GST for the Centre and the states. The empowered group also decided to immediately set up a joint working group to decide on a framework for a constitutional amendment for the purpose of introducing GST and a framework for a model legislation on GST for the Centre and the states. The joint working group will comprise officials of the finance ministry and other ministries of the Union government, and finance secretaries or commissioners of commercial taxes from states, Dasgupta said.The BJP, which was earlier opposed to the proposed implementation date and had concerns that it would result in rise in prices of essential commodities, struck a conciliatory note on Wednesday. BJP leader Yashwant Sinha said that the road map proposed for GST was a dual rate for states and if that was agreed upon it was a move in the right direction.

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