Govt finalises four-tier GST tax structure; zero rate on foodgrains used by common man

November 4, 2016

New Delhi, Nov 4: A four-tier GST tax structure of 5, 12, 18 and 28 percent that aims to lower tax incidence on most goods and keep out essential items was decided by a high-powered council on Thursday - a major breakthrough for rollout of the Goods and Services Tax regime from April 1 next year.

GSTLuxury items like high-end cars and demerit goods including tobacco, pan masala and aerated drinks, will be taxed at the highest rate and would also attract a cess in a way that the total incidence of tax remains at almost the current level.

With a view to safeguarding the interest of poor and keeping inflation under check, half the items in CPI basket like foodgrains, would not be taxed at all, while there would be two standard tax rates of 12 and 18 percent.

The lowest rate of 5 percent would be for common use items under the GST regime targetted to be rolled out from April 1, 2017.

After differences kept away a consensus on the issue at the last meeting, the all-powerful GST Council, headed by Union Finance Minister Arun Jaitley, has decided to impose an additional cess. It would be the difference between the current incidence and the 28 percent rate, not leading to increase in the final taxation.

Tobacco currently attracts about 65 percent total tax and for aerated drinks the current rate is about 40 percent.

Announcing the decisions arrived at the first day of the two-day GST Council meeting, Jaitley said highest tax slab will be applicable to items which are currently taxed at 30-31 per cent (excise duty of 12.5 per cent plus VAT 14.5 pc).

"...Finally the consensus is that these items, with cascading effect of 30-31 per cent, will now be taxed at 28 per cent, but with a rider. And the rider is that in this category there are several items which are now being used increasingly by a very large number of people, particularly the lower middle class. So for them 28 or 30 or 31 per cent rate will be higher, and so we are transferring them to 18 per cent," Jaitley told reporters here.

The final list of items for each tax bracket will be worked out by a committee, Jaitley said, adding that soap, oil, shaving stick, toothpaste and such products will likely to move down to 18 per cent bracket.

Chief Economic Advisor Arvind Subramanian said the rate structure "should probably serve to lower inflation...And should probably bring it down."

For most items, GST will be excise duty plus VAT and that incidence will decide on which tax bracket particular goods or items fall into. Asked about the incidence on automobiles, Jaitley said: "There is a difference between cars and luxury cars. Cars will come under 28 per cent, but luxury cars owners can afford to pay a little more".

Jaitley said Kerala had an alternate opinion on highest tax rate but "all decisions were taken by consensus... We have avoided voting".

Higher taxes for compensating states would have been "hugely burdensome for consumers" and the incidence of cess will not add a single rupee to prices, he said.

The collection from this cess as well as that of the clean energy cess would create a revenue pool which would be used for compensating states for any loss of revenue during the first five years of implementation of GST.

The cess would lapse after five years and any surplus to the cess pool at the end of 5 years would be shared between the Centre and states.

Jaitley said about Rs 50,000 crore would be needed to compensate states for loss of revenue from rollout of GST, which is to subsume a host of central and state taxes like excise duty, service tax and VAT, in the first year.

The 4-tier tax structure agreed to is a slight modification over the 6, 12, 18 and 26 per cent slabs proposed, which were discussed at the GST Council last month.

The structure agreed to is a compromise to accommodate demand for highest tax rate of 40 per cent by states like Kerala.

While the Centre proposed to levy a 4 per cent GST on gold, a final decision was put off, Jaitley said. Delhi Deputy Chief Minister Manish Sisodia favoured 2 per cent tax on gold, along with some other states.

Explaining the tax structure, Jaitley said foodgrains used by common people would be at zero-rate so that the impact of inflationary pressure on them is the least.

The second category of 5 per cent will be on items of mass consumption which are used particularly by common people.

The third category of standard rate of 12 and 18 per cent would accommodate most of the goods and services, which too are likely to fall in this bracket.

The fourth slab of 28 percent would be applicable mainly on white goods, on which the present tax incidence is 30-31 per cent. Those goods used by common man like soap, toothpaste, would be brought in the 18 percent bracket.

"We are broadly taking it to revenue neutrality and the gains out of this will be set off by narrowing the 28 percent slab. So you will have lesser items in 28 percent," he said.

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News Network
March 19,2020

New Delhi, Mar 19: Lawyer of Mukesh Singh, who is one of the four death row convicts in the Nirbhaya gang-rape and murder case, on Thursday mentioned a petition before the Registrar of the Supreme Court seeking an urgent hearing in the matter.

Advocate Manohar Lal Sharma, through the petition, sought directions to bring call record, documents and reports of his client through any probe agency and passed appropriate directions and measure to ensure justice in the matter.

The petition, however, has not sought a stay on the execution, which is scheduled for the morning of March 20. The petition is likely to be taken up for hearing today.

Earlier today, the apex court dismissed the curative petition of Pawan Gupta, another convict in the matter, who claimed juvenility at the time of the crime.

This comes as the four convicts -- Mukesh Singh, Akshay Singh Thakur, Vinay Sharma and Pawan Gupta -- are scheduled to be hanged at 5.30 am on March 20.

Meanwhile, several other petitions are also pending in the matter in different courts.

The case pertains to the brutal gang-rape and killing of a 23-year-old paramedical student in a moving bus on the night of December 16, 2012, by six people including a juvenile in the national capital. The woman had died at a Singapore hospital a few days later.

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News Network
February 21,2020

Patna, Feb 21: The country is paying the price for failure to send Muslims to Pakistan and bring Hindus to India after the Islamic state came into being at the time of Independence, Union minister Giriraj Singh has said, triggering a fresh controversy.

The BJP leader made the remark in Purnea district in the Seemanchal region of Bihar which has a sizeable Muslim population and where the Begusarai MP was canvassing in favor of the Citizenship (Amendment) Act.

Highlighting the need for such a legislation, he told reporters late Thursday "when our forefathers were fighting for Independence from British rule, Jinnah was pushing for the creation of an Islamic state".

"Our forefathers, however, committed a mistake. Had they ensured that all our Muslim brothers were sent to Pakistan and Hindus brought here, the need for such a move (CAA) would not have arisen. This did not happen and we have paid a heavy price for it," the outspoken BJP leader said.

The CAA, which seeks to fast-track granting citizenship to non-Muslim refugees from Pakistan, Bangladesh and Afghanistan who might have fled their home countries because of religious persecution, has become a major bone of contention since it is feared that a country-wide National Register for Citizens (NRC) may follow.

The Narendra Modi government, which had formerly hinted that a country-wide NRC was on the anvil, seems to have put it on the backburner though a section of citizens across the country, especially Muslims, have been organizing protests out of fear that, if implemented, the NRC may result in a large number of people becoming stateless.

Singh has often been in the crosshairs of the opposition for placing his foot in the mouth. This time, however, his words were frowned upon even by NDA ally Lok Janshakti Party, founded by his cabinet colleague Ram Vilas Paswan and now headed by his son Chirag Paswan.

The young LJP chief, who kicked off a state-wide "Bihar First-Bihari First" yatra here Friday morning, to project the NDAs progressive face ahead of the assembly polls due later this year, expressed strong disapproval of Singh's utterance and noted the coalition had to suffer in the Delhi polls because of "divisive" remarks by BJP leaders.

"We are an NDA constituent but many times our coalition partners say things which the LJP does not at all agree with. This one (Giriraj Singhs statement) is such an example. Had a person of my party spoken in this fashion, I would have taken responsibility and acted," Paswan said.

He said he had placed his view repeatedly on record that the coalition had to suffer on account of divisive remarks, Paswan said in apparent reference to inflammatory speeches by BJP leaders like Union minister Anurag Thakur and BJP MP Parvesh Verma, among others.

"The people of Delhi voted on the basis of performance. We wish they do so again in Bihar and real issues don't get drowned in political cacophony.

"The Nitish Kumar government has accomplished a lot, though much more needs to be achieved. We wish to reach out to people with our vision for the future, said Paswan, before he embarked on the yatra on a customized bus decorated like a chariot in front of which he offered prayers and smashed a coconut.

Meanwhile, Giriraj Singh who loves to wear his Hindu nationalism on the sleeves was busy joining issue with Asaduddin Owaisi's AIMIM which has been under attack for controversial remarks by its leader Waris Pathan.

Sharing video of an old speech by Owaisis brother Akbaruddin which had landed him in jail, besides Pathan's recent remark, Singh asked the opposition RJD-Congress combine in Bihar and the "tukde tukde gang" whether they wanted to "convert India into Pakistan".

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Agencies
May 27,2020

Lucknow, May 27: Uttar Pradesh chief minister Yogi Adityanath has taken a U-turn, two days after he declared that permission would be needed if other states employ workers from UP.

The issue sparked a major controversy and an official spokesman has now said that the government would not include this clause of 'prior permission' in the bye-laws of the Migration Commission.

The government spokesman also said it was working on modalities to set up the commission to provide jobs and social security to migrant workers returning to the state. It has named the migration commission as the "Shramik Kalyan Aayog (Workers welfare commission).

About 26 lakh migrants have already returned to the state and an exercise to map their skills is being carried out to help them get jobs.

Yogi Adityanath has discussed the modalities for setting up the commission and told his officers to complete the skill mapping exercise in 15 days.

A senior official of Team 11, said, "The chief minister discussed the modalities for setting up the commission, as well. There will be no provision requiring other states to seek UP government's prior permission for employing our manpower. The commission is being set up to provide jobs and social security to the workers. We will also link the migrants to the government schemes to provide them houses and loans etc."

Yogi Adityanath said a letter should be sent to all state governments to find out about migrant workers wanting to come back to Uttar Pradesh.

Earlier, the chief minister, while speaking at a webinar on Sunday, had said, "The migration commission will work in the interest of migrant workers. If any other state wants UP's manpower, they cannot take them just like that, but will have to seek permission of the UP government. The way our migrant workers were ill-treated in other states, the UP government will take their insurance, social security in its hands now. The state government will stand by them wherever they work, whether in Uttar Pradesh, other states or other countries."

The statement had sparked a row with some political leaders and parties questioning the move.

Former Congress president Rahul Gandhi sharply criticized Adityanath's stand, saying the workers were not the chief minister's personal property.

"It is very unfortunate that the chief minister of Uttar Pradesh views India in such a way. These people are not his personal property. They are not the personal property of Uttar Pradesh. These people are Indian citizens and they have the right to decide what they want to do and they have the right to live the life they want to live," he had said.

Maharashtra Navnirman Sena chief Raj Thackeray had also taken on Adityanath and said that if UP insists on "permission" before other states can employ workers from there, "then any migrant entering Maharashtra would need to take permissions from us, from the Maharashtra state, our police force too."

Meanwhile, the government spokesman said, "The chief minister is deeply moved by the condition of migrants. They have been treated badly by other states. So, when the chief minister spoke about the need for seeking UP government's permission, he did so as a guardian for workers. It's only his concern for the migrants that came out as a political statement."

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