Country wide GST to be implemented across India!

Q.  GST rate of what percent has been suggested by the GST Council for single GST rate?
- Published on 19 Oct 16

a. 18-19
b. 19-20
c. 16-17
d. 17-18

ANSWER: 17-18
 
India’s plan to implement a nation-wide GST entered the final stage with the GST Council coming up with a formula to compensate states in the event of revenue loss after the new system is adopted
  • On 18th Oct 2016, the council decided 2015-2016 will be taken as the base year for calculating revenue assuming secular and long term growth rate of 14 percent.
  • States will be fully compensated for potential revenue loss up to 5 years
  • GST Council has also finalised area based exemptions and 1 states including 8 NE states and three hilly states will be treated under the new tax regime.
  • The tax exemption provided by the states as incentives to the industry will be counted in the definition of revenue for calculation of revenue loss
  • Objective is to ensure rates will not be inflationary
  • There could be four slabs of GST rates namely 6,12,18 and 26 percent
  • The cess on the highest band could be for ultra luxury items and demerit items such as tobacco
  • The panel under CEA has recommended a revenue neutral rate of 15- 15.5 percent with a standard rate of 17-18 percent levied on most goods and all services

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