The Goods and Services Tax (GST) may go up to 40 per cent after the GST Council proposed raising the peak rate in the Bill to 20 per cent, from the current 14 per cent, to obviate the need for approaching Parliament for any change in rates in future.
The model Goods and Services Tax Bill will replace the clause that states the tax rate “not exceeding 14 per cent” with “not exceeding 20 per cent” when it comes up for debate in Parliament during the second phase of Budget Session beginning next week.
The change in the peak rate will not alter the four-slab rate structure of 5, 12, 18 and 28 per cent agreed upon last year for the moment, but is only a provision being built to take care of contingencies, officials said.
The revised draft of the model GST law, made public in November 2016, provides for a maximum rate of tax under the new regime at 14 per cent (14 per cent central GST and an equal state GST, taking the total to 28 per cent).
“There shall be levied a tax called the central/state goods and services tax (CGST/SG-ST) on all intra-state supplies of goods and/or services…,” the draft law states.
03 Mar 2021
04 Mar 2021