Latest news with #NextGenGST
NDTV
12 hours ago
- Business
- NDTV
Centre, States Equal Stakeholder In GST, Revenues Shared Equally: Report
New Delhi: Amid concerns about the revenue impact of the Centre's pro-middle-class 'Next Gen GST' with a proposed two-slab structure, government sources clarified that the Centre is an equal partner in revenue sharing with the states and that its proposal anticipates a revenue boost over time, driven by increased consumption. Under the current Goods and Services Tax (GST) framework, revenues are shared equally between the Centre and the states. Additionally, 41 per cent of the Centre's share of the divisible tax pool is allocated to states as per the Finance Commission's recommendations. "Centre has equal concerns over what is being collected and what will be collected in GST. As members of the GST Council, both are equal partners. In such a setup, is it fair to expect that the Government of India will sit as a donor to compensate states?" a government source said. Currently, Goods and Services Tax (GST) is a 4-tier structure with tax rates at 5 per cent, 12 per cent, 18 per cent, and 28 per cent. Food and essential items are either taxed at nil or a 5 per cent rate, and luxury and sin items are at 28 per cent. The 5 per cent slab accounts for 7 per cent of total GST revenues, while the 18 per cent slab accounts for 65 per cent. The 12 and 28 per cent slabs give 5 and 11 per cent share, respectively, in the GST kitty. The Centre has proposed to the Group of Ministers on GST rate rationalisation a 2-tier rate structure of 5 per cent and 18 per cent for 'merit' and 'standard' goods and services, and a 40 per cent rate for about 5-7 goods. The proposal entails doing away with the current 12 and 28 per cent tax slabs. Currently, states have exclusive taxation rights over land and petroleum products. Also, the Centre, under a special assistance scheme, is giving a 50-year interest-free loan for capital expenditure to states. Besides, the health and education cess and other cess collected by the Centre go towards funding state development and welfare needs through various central government schemes and initiatives. Compensation cess, which goes entirely to the states, accounts for a substantial chunk of the total cess collected by the Central Government. Another source said that calculations show that GST revenues will go up on a sustained basis once the new 2-tier slab is implemented. "Similar revenue concerns were expressed when the compensation cess period ended in June 2022. But GST revenues have improved over time, and the average tax buoyancy of states improved to 1.23 as against 0.65 pre-GST. With GST reforms proposed by the Centre, tax buoyancy will improve steadily," the second source said. The compensation cess mechanism was initially put in place for a 5-year period till June 30, 2022, to make up for the revenue loss suffered by states on account of GST implementation. GST had subsumed over a dozen local taxes and levies and was rolled out on July 1, 2017. The levy of compensation cess was later extended by 4 years till March 31, 2026, and the collection is being used to repay the loan that the centre had taken to compensate states for the GST revenue loss during the COVID period.
Time of India
17 hours ago
- Business
- Time of India
GST revamp: Centre, states equal stakeholders! Govt clarifies concerns over impact on state revenues
As the Centre is proposing a two-slab structure pro-middle-class 'Next Gen GST,' many are concerned about its impact on the revenue. However, government sources clarified that the Centre and the states are equal partners in sharing the revenue and the proposal might boost revenue over time, fueled by increased consumption. Under the current Goods and Services Tax (GST) framework, revenues are shared equally between the Centre and the states. Additionally, 41% of the Centre's share of the divisible tax pool is allocated to states as per the Finance Commission's recommendations. "Centre has equal concerns over what is being collected and what will be collected in GST. As members of the GST Council, both are equal partners. In such a setup, is it fair to expect that the Government of India will sit as a donor to compensate states?" PTI cited the government source. Currently, Goods and Services Tax (GST) is a 4-tier structure with tax rates at 5%, 12%, 18% and 28%. Food and essential items are either taxed at nil or 5% rate, and luxury and sin items are at 28%. The 5% slab accounts for 7% of total GST revenues, while the 18% slab accounts for 65%. The 12% and 28% slabs give 5% and 11% share, respectively, in the GST kitty. The Centre has proposed to the Group of Ministers on GST rate rationalisation a 2-tier rate structure of 5% and 18% for 'merit' and 'standard' goods and services, and a 40% rate for about 5-7 goods. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like This Could Be the Best Time to Trade Gold in 5 Years IC Markets Learn More Undo The proposal entails doing away with the current 12 and 28% tax slabs. Currently, states have exclusive taxation rights over land and petroleum products. Also, the Centre, under a special assistance scheme, is giving a 50-year interest-free loan for capital expenditure to states. Besides, the health and education cess and other cess collected by the Centre go towards funding state development and welfare needs through various central government schemes and initiatives. Compensation cess, which goes entirely to the states, accounts for a substantial chunk of the total cess collected by the Central Government. Another source said that calculations show that GST revenues will go up on a sustained basis once the new 2-tier slab is implemented. "Similar revenue concerns were expressed when the compensation cess period ended in June 2022. But GST revenues have improved over time, and the average tax buoyancy of states improved to 1.23 as against 0.65 pre-GST. With GST reforms proposed by the Centre, tax buoyancy will improve steadily," PTI reported, citing the second source. The compensation cess mechanism was initially put in place for a 5-year period till June 30, 2022, to make up for the revenue loss suffered by states on account of GST implementation. GST had subsumed over a dozen local taxes and levies and was rolled out on July 1, 2017. The levy of compensation cess was later extended by 4 years till March 31, 2026, and the collection is being used to repay the loan that the Centre had taken to compensate states for the GST revenue loss during the Covid period. Stay informed with the latest business news, updates on bank holidays , public holidays , current gold rate and silver price .
Time of India
19 hours ago
- Business
- Time of India
Centre, States equal stakeholder in GST, revenues shared equally: Govt source
Under the current Goods and Services Tax (GST) framework, revenues are shared equally between the Centre and the states. Additionally, 41 per cent of the Centre's share of the divisible tax pool is allocated to states as per the Finance Commission's recommendations. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Amid concerns about the revenue impact of the Centre's pro-middle-class 'Next Gen GST ' with a proposed two-slab structure, government sources clarified that the Centre is an equal partner in revenue sharing with the states and that its proposal anticipates a revenue boost over time, driven by increased the current Goods and Services Tax (GST) framework, revenues are shared equally between the Centre and the states. Additionally, 41 per cent of the Centre's share of the divisible tax pool is allocated to states as per the Finance Commission's recommendations."Centre has equal concerns over what is being collected and what will be collected in GST. As members of the GST Council, both are equal partners. In such a setup, is it fair to expect that the Government of India will sit as a donor to compensate states?" a government source Goods and Services Tax (GST) is a 4-tier structure with tax rates at 5 per cent, 12 per cent, 18 per cent and 28 per cent. Food and essential items are either taxed at nil or 5 per cent rate, and luxury and sin items are at 28 per 5 per cent slab accounts for 7 per cent of total GST revenues, while the 18 per cent slab accounts for 65 per cent. The 12 and 28 per cent slabs give 5 and 11 per cent share, respectively, in the GST Centre has proposed to the Group of Ministers on GST rate rationalisation a 2-tier rate structure of 5 per cent and 18 per cent for 'merit' and 'standard' goods and services, and a 40 per cent rate for about 5-7 goods. The proposal entails doing away with the current 12 and 28 per cent tax states have exclusive taxation rights over land and petroleum products. Also, the Centre, under a special assistance scheme, is giving a 50-year interest-free loan for capital expenditure to the health and education cess and other cess collected by the Centre go towards funding state development and welfare needs through various central government schemes and cess, which goes entirely to the states, accounts for a substantial chunk of the total cess collected by the Central source said that calculations show that GST revenues will go up on a sustained basis once the new 2-tier slab is implemented."Similar revenue concerns were expressed when the compensation cess period ended in June 2022. But GST revenues have improved over time, and the average tax buoyancy of states improved to 1.23 as against 0.65 pre-GST. With GST reforms proposed by the Centre, tax buoyancy will improve steadily," the second source compensation cess mechanism was initially put in place for a 5-year period till June 30, 2022, to make up for the revenue loss suffered by states on account of GST implementation. GST had subsumed over a dozen local taxes and levies and was rolled out on July 1, levy of compensation cess was later extended by 4 years till March 31, 2026, and the collection is being used to repay the loan that the centre had taken to compensate states for the GST revenue loss during the COVID period.
News18
19 hours ago
- Business
- News18
Centre, States equal stakeholder in GST, revenues shared equally: Govt source
New Delhi, Aug 18 (PTI) Amid concerns about the revenue impact of the Centre's pro-middle-class 'Next Gen GST' with a proposed two-slab structure, government sources clarified that the Centre is an equal partner in revenue sharing with the states and that its proposal anticipates a revenue boost over time, driven by increased consumption. Under the current Goods and Services Tax (GST) framework, revenues are shared equally between the Centre and the states. Additionally, 41 per cent of the Centre's share of the divisible tax pool is allocated to states as per the Finance Commission's recommendations. 'Centre has equal concerns over what is being collected and what will be collected in GST. As members of the GST Council, both are equal partners. In such a setup, is it fair to expect that the Government of India will sit as a donor to compensate states?" a government source said. Currently, Goods and Services Tax (GST) is a 4-tier structure with tax rates at 5 per cent, 12 per cent, 18 per cent and 28 per cent. Food and essential items are either taxed at nil or 5 per cent rate, and luxury and sin items are at 28 per cent. The 5 per cent slab accounts for 7 per cent of total GST revenues, while the 18 per cent slab accounts for 65 per cent. The 12 and 28 per cent slabs give 5 and 11 per cent share, respectively, in the GST kitty. The Centre has proposed to the Group of Ministers on GST rate rationalisation a 2-tier rate structure of 5 per cent and 18 per cent for 'merit' and 'standard' goods and services, and a 40 per cent rate for about 5-7 goods. The proposal entails doing away with the current 12 and 28 per cent tax slabs. Currently, states have exclusive taxation rights over land and petroleum products. Also, the Centre, under a special assistance scheme, is giving a 50-year interest-free loan for capital expenditure to states. Besides, the health and education cess and other cess collected by the Centre go towards funding state development and welfare needs through various central government schemes and initiatives. Compensation cess, which goes entirely to the states, accounts for a substantial chunk of the total cess collected by the Central Government. Another source said that calculations show that GST revenues will go up on a sustained basis once the new 2-tier slab is implemented. 'Similar revenue concerns were expressed when the compensation cess period ended in June 2022. But GST revenues have improved over time, and the average tax buoyancy of states improved to 1.23 as against 0.65 pre-GST. With GST reforms proposed by the Centre, tax buoyancy will improve steadily," the second source said. The compensation cess mechanism was initially put in place for a 5-year period till June 30, 2022, to make up for the revenue loss suffered by states on account of GST implementation. GST had subsumed over a dozen local taxes and levies and was rolled out on July 1, 2017. The levy of compensation cess was later extended by 4 years till March 31, 2026, and the collection is being used to repay the loan that the centre had taken to compensate states for the GST revenue loss during the COVID period. PTI JD ANZ JD SHW view comments First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
The Print
19 hours ago
- Business
- The Print
‘Next Gen GST' precursor to eventual single tax slab GST: Sources
New Delhi, Aug 16 (PTI) Describing the proposed GST tax reforms as 'Next Gen GST', senior government officials on Saturday said that the two-slab tax regime will eventually pave the way for a single sales/services tax rate, hopefully by 2047. They said the proposed new GST regime, which slashes tax rates and assigns just two slabs of 5 per cent and 18 per cent, will boost the economy and also serve to mitigate tariff threats.
