Two-rate structure
For State GST, the
Empowered Committee has agreed on a two-rate structure —
a lower rate for necessary items and goods of basic
importance and a standard rate for goods in general.
There will also be a special rate for precious metals
and a list of exempted items.
States want the
Centre to adopt a two-rate structure for goods in
respect of CGST, with conformity in the levels of rate
under the SGST. For taxation of services, the States are
keen that there may be a single rate for both CGST and
SGST.
Without committing
on the possible rates for State GST, Dr Dasgupta said
that the rates will be made known duly in the course of
appropriate legislative actions.
On the issue of
threshold for State GST, it has been agreed that a
threshold of gross annual turnover of Rs 10 lakh both
for goods and services for all the States and Union
Territories be adopted. Currently, the threshold
prescribed in different State VAT Acts below which VAT
is not applicable varies from State to State.
States want the
threshold for Central GST in respect of goods be kept at
Rs 1.5 crore and that for services be placed
“appropriately high”. Currently, there is a separate
threshold of services (Rs 10 lakh) and goods (Rs 1.5
crore) in service tax and CENVAT.
While exports would
be zero-rated, similar benefits may be given to special
economic zones (SEZ). Only processing zones in SEZs will
be eligible for the benefits. No benefit will be allowed
for sales from a SEZ to domestic tariff area, says the
discussion paper.
GST will be levied
on imports with necessary constitutional amendments.
Both CGST and SGST will be levied on import of goods and
services into the country. While destination principle
will prevail in deciding the incidence of tax, the tax
revenue in case of SGST will accrue to the State where
imported services and goods are consumed.
Also, full set-off
will be available on the GST paid on import on goods and
services.
Sour
