Goods and Services Tax or GST slated to be rolled out from July 1 this year will come with no shocks. Tax rates for the different commodities under the GST regime shall fall in place in line with the current rates with only a slight diversion i.e. no major difference would be witnessed. Also, the draft guidelines per se rules and regulations for GST have been put forth.
Jaitley in one of the news dailies was quoted remarking "We are now in the final stages of fixing tariffs for different commodities. The formula under which it is being done has also been explained and therefore nobody is going to be taken by surprise". Jaitley also asked companies to provide any kind of savings to consumers in the form of lower tax rate under GST regime. The step aims at curbing the current compounding effect due to central as well as state tax-levies.
As per the US Federal Reserve Paper, implementation of GST will boost economic growth of India by 4.2%. Also, as per the IMF highlights, the GST roll out would help India attain a GDP level of over 8%.
The GST Council had earlier decided on four slab rates after unifying service tax, central excise and Value Added Tax (VAT) - 5%, 12%, 18% and 28%. To finalise the GST tax rate for different goods and services, Finance Minister as well as representatives from all the states are scheduled to meet on May 18 and 19 in Srinagar and take on the final GST call.