Page 49 - Plastics News September 2016
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FEATURES
subsumed under GST. While identifying, the following (e) Additional Customs Duty, commonly known as
principles were kept in mind: Countervailing Duty (CVD)
(i) Taxes or levies to be subsumed should be primarily (f) Special Additional Duty of Customs - 4% (SAD)
in the nature of indirect taxes, either on the supply
of goods or on the supply of services. (vii) Surcharges, and
(ii) Taxes or levies to be subsumed should be part of the (viii)Cesses.
transaction chain which commences with import/
manufacture/ production of goods or provision of The following State taxes and levies would be, to
services at one end and the consumption of goods begin with, subsumed under GST:
and services at the other.
(a) VAT / Sales tax
(iii) The subsumation should result in free ?ow of tax
credit in intra and inter-State levels. (b) Entertainment tax (unless it is levied by the local
bodies).
(iv) The taxes, levies and fees that are not speci?cally
related to supply of goods & services should not be (c) Luxury tax
subsumed under GST.
(d) Taxes on lottery, betting and gambling.
(v) Revenue fairness for both the Union and the States
individually would need to be attempted. (e) State Cesses and Surcharges in so far as they relate
to supply of goods and services.
On application of the above principles, the Empowered
Committee has recommended that the following (f) Entry tax not in lieu of Octroi.
Central Taxes should be, to begin with, subsumed
under the Goods and Services Tax: Purchase tax:
(a) Central Excise Duty Some of the States felt that they are getting substantial
revenue from Purchase Tax and, therefore, it should not
(b) Additional Excise Duties be subsumed under GST while majority of the States were
of the view that no such exemptions should be given.
(c) The Excise Duty levied under the Medicinal and The dif?culties of the foodgrain producing States was
Toiletries Preparation Act appreciated as substantial revenue is being earned by
them from Purchase Tax and it was, therefore, felt that
(d) Service Tax in case Purchase Tax has to be subsumed then adequate
and continuing compensation has to be provided to such
States. This issue is being discussed in consultation with
the Government of India.
Tax on items containing Alcohol:
Alcoholic beverages would be kept out of the purview of
GST. Sales Tax/VAT could be continued to be levied on
alcoholic beverages as per the existing practice. In case
it has been made Vatable by some States, there is no
objection to that. Excise Duty, which is presently levied
by the States may not also be affected.
Tax on Tobacco products:
Tobacco products would be subjected to GST with ITC.
Centre may be allowed to levy excise duty on tobacco
products over and above GST with ITC.
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