GST Council meet today to fix rates on goods, services
The tax that 1.3 billion Indians will pay on buying salt to luxury cars and on services like phone calls to dining out will be decided at the GST Council meet starting on Thursday in Srinagar, where a tight security cover has been thrown in view of recent protests.
Srinagar has been chosen as the venue for this crucial GST Council meeting, which will have in attendance Union Finance Minister Arun Jaitley and his ministry officials as well as representatives of 29 states and union territories, to send out possibly a message to the people of Jammu and Kashmir on the importance it holds for the country.
The Council over the next two days will fit most of goods and services in either 5, 12, 18 or 28 per cent tax bracket.
The rates thus fixed will be charged from July 1, the scheduled date for rollout of Goods and Services Tax (GST) -- India's biggest tax overhaul since independence.
The GST will be a national sales tax that will be levied on consumption of goods or use of services. It will replace 16 current levies -- seven central taxes like excise duty and service tax and nine state taxes like VAT and entertainment tax -- thereby creating India as one market with one tax rate.
Jaitley had earlier this month expressed confidence of the GST Council arriving at tax rates in the May 18-19 meeting.
Around 1,000 security personnel will be pressed into service for sanitising the conference venue and the hotels the officials will be staying. Another 400 men will be deployed for the security of the delegates, state police official said.
Holding of the meeting in Srinagar is not just the Centre's initiative but many of the states too had demanded way back in February that the Council should meet in Jammu and Kashmir when it decides the tax rates, official sources said.
With the GST, India will join select league of nations with a goods and service tax. France was the first country to implement the GST in 1954.
Since then Germany, Italy, the UK, South Korea, Japan, Canada and Australia have been among the over a dozen nations which have implemented the GST. China implemented GST in 1994 while Russia did it in 1991. Saudi Arabia plans to do it in 2018.
Last week, the Reserve Bank called the GST a "game changer" and said given the cross-country experience and empirical evidence on efficiency gains from the Value Added Tax (VAT) in the Indian context, the implementation of this comprehensive indirect tax is likely to ensure higher tax buoyancy and an improvement in government finances over the medium term.