Taxation
Services to have 4-slab GST rates, no decision on gold
The Goods and Services Tax (GST) Council concluded its latest round of meetings on Friday with the decision to apply the same four tax rate slabs for services as for goods, exempting, however, healthcare and educational services from the purview of the GST.
 
Speaking to reporters here following the meeting, Kerala Finance Minister Thomas Isaac said that no consensus could be reached on the rate to apply on gold, and that the next meeting of the GST Council has been fixed for June 4.
 
"We could not come to a decision in this meeting on the rate to apply on gold," Issac said. 
 
"Services will have the same four multi-slab structure of tax rates as for goods," he said. 
 
The council on Thursday approved the tax rates for 1,211 items, of which 7 per cent will be exempted, 14 per cent will be in the 5 per cent slab, 17 per cent in the 12 per cent category, 43 per cent in the 18 per cent segment, while 19 per cent of goods will go into the top tax bracket of 28 per cent.
 
"Services, which are at currently taxed 15 per cent will be fitted into the 18 per cent bracket. However, services will get the benefit of input tax credit for the goods used, so real incidence of taxation will be lower than the headline rate," Isaac added. 
 
He said that while "luxury services" would attract the highest rate of 28 per cent, health and education services would be exempt categories.
 
"Telecom services would continue to be taxed at the same rates of the past. Not in a single case has there been an increase in taxes from before," he added. 
 
Union Finance Minister Arun Jaitley told the media here on Thursday, after the first day of the council meeting, that "there is no increase in taxes of the items considered today. In fact, for many of them, taxes have come down." 
 
An overwhelming 81 per cent of items will attract tax of 18 per cent or below. Only 19 per cent of items will be taxed at the highest rate of 28 per cent.
 
Jaitley said that while the overall basket of taxes will see a reduction, he hoped for greater tax buoyancy because of greater efficiency and less tax evasion.
 
"On many commodities there would be reduction because of the cascading effect, but we are banking on the hope that because of a better tax system and less evasion there would be tax buoyancy," he said.
 
In a major measure of support to industry, the rate for capital goods, as well as industrial and intermediate items have been set at 18 per cent. 
 
Commenting on the GST Council's deliberations, a senior tax analyst said the rates announced were along expected lines.
 
"However, it seems a lot of work is yet to be done. Exemptions and issues related to reverse charge mechanism have not been finalised, and looks doubtful that it will be done in a day," said Taxmann.com Senior Consultant V.S Datey.
 
"Thus the chances of introducing GST by July 1 appears doubtful," he added.
 
"Companies would now quickly want to compute/re-compute the impact of rate change, if any, on their products and consequential change in their related margins," Partner in international accounting firm KPMG in India Harpreet Singh said in a statement here.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

No tax on food items, contraceptives; mobile phone levy at 12% under GST
With the Goods and Services Tax (GST) Council deciding the tax rate on 1,211 goods on Thursday, there is cheer for the common man as 81 per cent of the goods are below 18 per cent, though people will have to shell out more even for small segment cars with additional cess levied on them.
 
Milk, eggs, salt, fresh vegetables, fruits, contraceptives, organic manure, earthen pots, coconut, prasadam supplied by religious places like temples, mosques, churches, gurudwaras and dargahs have been exempted under GST.
 
Live animals, fruit juices and meat will call for a 12 per cent tax while fish has been put in the 5 per cent tax rate.
 
Butter and cheese have been placed under the 12 per cent tax rate and condensed milk under 18 per cent. 
 
Beverages such as coffee (not instant), tea and groundnut, coal, hand pumps will attract 5 per cent tax under GST.
 
While jaggery is exempt under GST, cane sugar and beet sugar are in the 5 per cent tax slab. Bio gas plant, wind mills and kerosene lantern will also be under the 5 per cent tax rate.
 
Mobile phones, fountain pen ink, tooth powder, incense sticks, feeding bottles, Braille paper, children's colouring books, umbrellas, pencil sharpeners, tractors, bicycles, contact lenses, spectacle lenses, utensils, sports goods, fishing rods, combs, pencils and hand paintings have been placed under the 12 per cent tax rate under GST.
 
Bindi, vermilion, glass bangles, handlooms, hearing aids and handmade musical instruments have also been exempt under GST. A total of 7 per cent of items have been kept zero rated.
 
The goods which will fall under 18 per cent tax rate include helmets, LPG stoves, nuclear reactors, clocks, military weapons, electronic toys and plastic buttons.
 
The items which have been put in the highest tax slab of 28 per cent include aerated drinks, perfumes, after-shave lotions, deodarants, clothing of furskin, razor blades, cars, revolvers, pistols, 
 
More than 200 products appear in the 28 per cent tax slab. 
 
"Ideally, few products should have been put in 28 per cent bracket and 18 per cent should have been a miscellaneous schedule (to cover all balance products). The temptation of putting more products under 28 per cent bracket will certainly complicate the Indian GST structure," GST expert Pritam Mahure told IANS.
 
Compensation cess: 55 products will attract compensation cess. 
 
The cess on small cars ranges from 1-3 per cent, 3 per cent on motorcycles with 350 cc engine, personal aircraft and yachts while mid-segment and large cars will attract a cess of 15 per cent. 
 
All goods, other than pan masala containing tobacco 'gutka' will have to bear a cess of 89 per cent while tobacco and tobacco products will call for a cess in the range of 12.5-290 per cent. Cess of 5 per cent has been levied on cigarettes and 60 per cent on pan masala. Aerated drinks will attract a cess of 12 per cent.
 
Mahure says that it is expected that a few classification disputes may continue like whether groundnut chikki should be classified as 'sweetmeat' attracting 5 per cent GST rate or sugar confectionery attracting 18 per cent GST rate. 
 
Now, the manufacturers/traders will have to quantify the impact of the GST rates on their product prices and update their tax masters/registers with these rates. This is a complex exercise for traders who are not very conversant with tariff codes and classification, he added.
 
The rate structure for the remaining goods -- bidi wrapper leaves, biscuits, bidis, textiles, footwear, natural or cultured pearls, precious or semi-precious stones, precious metals, imitation jewellery, power driven agricultural, horticultural, forestry, poultry keeping or bee-keeping machinery and harvesting machinery is expected to be decided on Friday in the GST Council's meeting on the second day in Srinagar.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

Delhi HC clears decks for IT assessment into National Herald case
The Delhi High Court on Friday declined to entertain a plea by Young Indian Pvt Ltd (YI), of which Congress President Sonia Gandhi and Vice President Rahul Gandhi are the main stakeholders, challenging Income Tax notices served to the company -- clearing the decks for an IT probe.
 
The case stems from a complaint by BJP leader Subramanian Swamy, who had alleged "cheating" in the acquisition of Associated Journal Limited (AJL), the publisher of National Herald, by YI -- a firm in which Sonia and Rahul Gandhi each have a 38 per cent stake.
 
Swamy had alleged that the Congress gave an unsecured loan to YI to acquire AJL.
 
The company withdrew the plea after a division bench of Justice S. Muralidhar and Justice Chander Shekhar asked it to approach the concerned Income Tax assessing officer. 
 
The bench dismissed the plea as it was withdrawn.
 
The plea had sought quashing of two Income Tax notices sent to YI in January and March with regard to the assessment year 2011-12. The plea also urged the court to give a direction to the IT Department to not take further action against it on the basis of these notices.
 
Besides the Gandhis, Congress leaders Motilal Vora, Oscar Fernandes, Suman Dubey, Sam Pitroda and YI are accused in the case.
 
Swamy had accused them of allegedly conspiring to cheat and misappropriate funds by just paying Rs 50 lakh, by which YI obtained the right to recover Rs 90.25 crore which AJL owed to the Congress.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Online Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Online Magazine)