oppn parties GST: Why Impose Cess?

News Snippets

  • The Army conducts an operational alert exercise in eastern Ladakh
  • The IAF reopened the Vijaynagar advance landing ground, an airstrip in Arunachal Pradesh near the Chinese border
  • Amit Shah says he never sought to impose Hindi
  • Government bans the manufacture and sale of e-cigarettes in India
  • Mamata Banerjee seeks an appointment with Home Minister Amit Shah today
  • Bengal CM Mamata Banerjee meets PM Modi in what she later described as a government-to-government meeting
  • Supreme Court sets a deadline of October 18 for completing the hearings in the Ayodhya case
  • Pakistan rejects India's request for use of its airspace when PM Modi flies to the US later this week
  • Crude prices fall sharply as Saudi Arabia assures normal production in a few weeks. Prices fall by 5.4% to $65.30 per barrel
  • Sensex tumbles 700 points over fears that rising crude prices will deal a body blow to the tottering Indian economy
  • As Rajeev Kumar fails to appear before the CBI despite several notices, the agency forms a special team to locate and apprehend him
  • S Jaishankar says Pakistan is not a normal neighbour and its behaviour is a "set of aberrations"
  • External Affairs Minister S Jaishankar says PoK in Indian territory and the country hopes to have physical jurisdiction over it one day
  • Barasat Sessions court near Kolkata rejects Rajeev Kumar anticipatory bail application citing lack of jurisdiction as the reason
  • PM Modi celebrates his birthday with Narmada aarti and later has lunch with his mother.
Sunni Wakf Board and Nirvani Akhara write to the Supreme Court for a negotiated settlement to the Ayodhya dispute
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GST: Why Impose Cess?

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
The GST Council, in its collective wisdom, still thinks that imposing a cess on the highest taxed slab of so-called sin goods is necessary. But it goes against the principle of GST which was envisioned and designed to subsume all cesses. Any compensatory pool could have been created by earmarking a percentage from sin goods for that purpose, while taxing them at a still higher percentage. Once a precedent for imposing cess is put in place, it is likely to be abused on the smallest of pretexts.

The other decisions of keeping daily essentials out of the ambit and taxing other regular necessities at just 5% need to be welcomed. But the government will have to ensure that companies pass on the benefits to the consumer and do not increase prices to realize the stated benefit of less inflationary pressure. It also needs to be ensured that most other products and services come under the 18% slab. Luxury items taxed at 28% should exclude smaller petrol and electric cars.

It is good that a consensus has been reached on the rates. It will ensure an early roll-out. The Council should rethink the cess and exemptions should be kept at a minimum. The focus should now be on the IT backbone, the training of staff and the actual transition. The teething problems can be sorted out once GST is up and rolling.