GST update

The government has said that a broad agreement has been achieved with the states on most of the issues concerning the implementation of Goods and Services Tax (GST), which is scheduled to be rolled out from April 1, 2016. The states, minister of state for finance Jayant Sinha said, will be “insulated“ from the impact of GST on their revenues and gradually the new tax regime will also cover petroleum and petroleum products. “The tax rate under GST may be nominal or zero-rated for the time being. This has been proposed to insulate the revenues of the states from the impact of GST, with the expectation that in due course, GST will be levied on petroleum and petroleum products,“ Sinha said in a written reply to Rajya Sabha. To another question, he said government has assured states of compensation for any revenue losses incurred by them from the date of introduction of GST, for a period of three years. “There has been broad agreement on most issues related to GST with the states in the recent months and the GST rollout is scheduled on April 1, 2016,“ Sinha said. The GST will subsume indirect taxes like excise duty and service tax at the central level and VAT and local levies on the states front. The GST Constitutional Amendment Bill, which was introduced in the Lok Sabha in 2011, had lapsed and the NDA government will be required to come up with a fresh bill.
States have been demanding that petroleum, alcohol and tobacco be kept out of the purview of GST.
The GST rollout has missed several deadlines because of lack of consensus among states over certain crucial issues on the proposed new tax regime.

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