India GST Rate Favored at 16 Percent
Feb. 9 – India’s Finance Ministry is considering a rate of 16 percent for the proposed Goods and Services Tax (GST) for both Center and states combined on companies and traders with annual turnover of US$21,609 and above.
The new tax will help simplify goods production by setting one tax structure instead of India’s current multiple tax structure. The GST will only be levied once at the point of supply thus decreasing costs for consumers.
Previously, the implementation of the new GST was set for April this year but was moved back by six months because of many still unresolved details of the new tax. Moreover, some states complained that they were not prepared for the new uniform tax and would need more time to adjust.
A member Central Board of Excise and Customs, Sumit Dutt Majumder, said central excise and state VAT would still have to be charged on so-called ‘sin goods’ like tobacco and alcohol and taxed higher. The GST may also contain an estimated 50 exemptions based on a former list of exempted goods under the VAT regime.
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