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Sources said the Purchase
Tax is likely to be subsumed within GST. Only Punjab and Haryana are against the
Purchase Tax being subsumed.
The 16-18% rate is if
alcohol and petroleum is not subsumed in the tax base. The revenue neutral rate
is seen at 16-18%. The pre-slowdown effective indirect tax rate was 28-29%.
The Centre-state differences continue over the tax base. The Centre's assessment
of the tax base stands at Rs 20 lakh crore while the state assessment is Rs 13
lakh crore. The revenue neutral rate at Rs 13 lakh crore tax base works out to
20%. The threshold level of taxation of services is likely at Rs 10 lakh.
State finance ministers
are likely to meet in April on the GST package.
Sources said the
government could miss its April 1 GST deadline. The GST constitutional amendment
may be sent to Supreme Court. The referral to the apex court could delay the GST
process by 6-8 months.
Source:
Moneycontrol.com, India, dated
06/04/2010
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