The winter session of Parliament will start on November 16. It will be a month-long session that will end on December 16, the cabinet committee on parliamentary affairs. In its legislative push for the upcoming winter session of Parliament, the National Democratic Alliance (NDA) is focusing on laws addressing social and economic issues.

Besides three bills to roll out the goods and services tax (GST), the proposed laws likely to be moved before Parliament include ones relating to surrogacy, mental health and making education mandatory and free for children.

The supporting bills on GST are the central GST law, integrated GST law and one to guarantee compensation to states for losses arising from a transition to GST. These will spell out the fine print of GST’s design and will lay down the basis of how rules will be formulated under GST.

Other items on the legislative agenda include the Maternity Benefit (Amendment) Bill, 2016, The Whistle Blowers Protection (Amendment) Bill, 2015, Surrogacy (Regulation) Bill, 2016 and The Mental Health Care Bill, 2013.

Four-tier GST structure proposed: A four-tier structure for Goods and Services Tax (GST) comprising a lower rate of 6 per cent, two standard rates of 12 per cent and 18 per cent, and a higher rate of 26 per cent with an additional cess for luxury and demerit goods were proposed in the third meeting of the GST Council.

During the meeting, it was discussed that the GST rate should not be regressive in nature and be such that the existing revenues of states and Centre are protected and the impact on CPI inflation is minimal. It was said that the items being consumed by upper middle class and rich, which are being taxed at higher rate presently, should not be taxed at a rate lower than their present tax incidence, while items of mass consumption should not be taxed at a higher rate.

It was discussed that the items which are exempt from excise (currently at 300) and are taxed at a lower VAT rate of 5-6 per cent can be taxed at 12 per cent, while items with at least 27 per cent tax incidence can be taxed at a standard rate of 18 per cent under the GST regime. Items presently being taxed at standard rate by both Centre and states are proposed to be kept in higher tax slab.

The GST Council finalised the compensation formula for states for potential revenue loss, converging at an assumption of 14 per cent revenue growth rate over the base year of 2015-16 for calculating compensation for states in the first five years of implementation of GST. States getting lower revenue than this would be compensated by the Centre.

The Finance Minister said that all decisions of the GST Council are being taken with consensus.

from

Vandana/Communicative English with Media Studies/Patna Women’s College

  economy, Goods & services tax, letter to the editor