entertainment & entry tax may survive GST
are not in favour of subsuming all taxes into the Goods
and Services Tax even after the introduction of the
unified GST in 2010. It is likely that octroi, entry
tax, entertainment tax and electricity duty will
continue even in the new regime.
The issue was deliberated at length at the meeting of
the empowered committee of state finance ministers but
differences remain, a source said. “States feel they
would lose substantial revenues if such taxes are
subsumed within GST,” he said.
taxes may not be subsumed immediately,” empowered
committee chairman Asim Dasgupta told reporters after the
meeting on Thursday.
The empowered committee set up a panel to work out the
rates for GST in a month. The panel would comprise state
finance secretaries, commissioners of commercial taxes and
concerned joint secretaries in the union finance ministry,
advisor to the finance minister Parthasarthy Shome and
empowered committee member-secretary Satish Chandra.
The committee was in favour of two sets of rates for goods
and a single rate for services which would be levied both
at the central and state level. This issue would also be
examined by the panel.
Mr Dasgupta said the GST rates would be “very few”.
“The whole idea is that revenue neutral (GST) rates
should not be too high,” he said. The empowered
committee had last month accepted the recommendation of a
working group on GST to have dual GST structure — one at
the state level and the other at the central level.
“In the dual GST model formulated, overall incidence of
tax will be lower than before, yet there will be better
tax compliance and would be better for consumers,” Mr
Based on the recommendations of the GST rates panel, and
views of state finance ministers, a model would be
crystallised and subsequently, a report would be submitted
to finance minister P Chidambaram.
The empowered committee would then call a meeting of
chambers of commerce and industry and trade associations
and work out a draft white paper on GST. This draft would
be put on the website for public comments.
Proposed to be introduced from April 1, 2010, GST is
intended to integrate all indirect taxes on goods and
services at the state and the central level.
Times - Gurgaon, Haryana, India, dated 21/12/2007