State Finance Ministers Win Some, Lose Some, At 16th GST Council Meet
Even as another GST Council meeting is scheduled for June 18, there’s consensus on the July 1 rollout.
The Goods and Service Tax (GST) Council revised the tax rates for sixty six goods and increased the limit of the composite scheme to Rs 75 lakh during its meet in Delhi. While the state finance ministers had mixed reactions to the decisions taken, they all seem to agree on one thing – they are ready for the July 1 GST rollout.
“We are ready if the Centre is ready,” said Kerela’s Finance Minister Thomas Isaac, to BloombergQuint. Though there will be some “hitches”, the decision of the rollout belongs to the Centre, he added.
With just weeks to go, finance professionals, banks and industries seem unprepared for the challenges of implementing the one nation-one tax idea. The tax reform’s successful implementation could turn out to be a leading factor in the Bharatiya Janata Party’s election proceedings in 2019.
Here’s what else the state finance ministers had to say.
Punjab: Manpreet Singh Badal
Punjab’s Finance Minister said that he was satisfied with the day’s work, since the state’s main concerns were addressed.
As far as Punjab is concerned, we were concerned about diesel engines, and certain machinery and tractor parts,Manpreet Singh Badal, Finance Minister, Punjab
The GST Council revised the tax rate on certain tractor components to 18 percent from the previous 28 percent.
Kerala: Thomas Isaac
The Council still has some items to revisit in the next meeting, including hybrid vehicles. After a lot of discussion, the Council seemed to agree that the rate should be “revisited”, said Isaac.
This is the only type of car whose rate is going up, which is highly unfair, because this is a very environment friendly product.Thomas Isaac, State Finance Minister, Kerela
Hybrid vehicles are currently clubbed with luxury cars which are being taxed at 28 percent, with an additional 15 percent cess.
Delhi: Manish Sisodia
While the Council addressed a number of necessary goods, the Deputy Chief Minister of Delhi was disappointed that Council did not revise rates for construction materials such as marble, granite, timber and prescription glasses.
If we keep an 18 percent or 28 percent tax on these above mentioned products, these products used in everyday consumption will become expensive.Manish Sisodia, Deputy Chief Minister, Delhi
Maharashtra: Sudhir Mungantiwar
Maharashtra’s Finance Minister Sudhir Mungantiwar was pleased that the GST Council revised the rates on 11 of 14 items that the state presented for review.
The one disappointment for Maharashtra was that the state had asked for a blanket reduction in the tax rate on cinema tickets to 18 percent. Under the revised rate structure, cinema tickets worth Rs 100 or less will be taxed at 18 percent, while those above Rs 100 will be taxed at 28 percent.
West Bengal: Amit Mitra
The Finance Minister of West Bengal called upon other states to reimburse regional cinema producers in their respective territories, saying that the rates were still too high.
West Bengal currently applies a 2 percent tax on regional cinema, which is much lower than the 18 percent and 28 percent GST rates on the sector, he said.
The increase in the upper limit for the composite scheme to Rs 75 lakh is a good move and will lead to job creation, Mitra added.