oppn parties GST: Why Impose Cess?

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  • Former Pakistani cricketer Shoaib Akhtar proposes an Indo-Pak ODI series to raise funds for fighting coronavirus
  • Maharashtra government says many Tablighi Jamaat members who attended the Markaz and returned have gone into hiding
  • West Bengal government identifies hotspots in Kolkata and the rest of the state, inclined to extend the lockdown in those places only
  • Prime Minister Modi holds a video conference with floor leaders of opposition parties, hints at extending the lockdown
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  • Corona cases in India cross 4000 and the death toll stands at 124
  • The government decides to double the testing of corona suspects from 10000 now to 20000 in the next three days
  • Flipkart assures employees that there will be no job or salary cuts due to the COVID-19 pandemic
COVID-19: 773 new cases and 32 deaths in the last 24 hours, reports the health ministry
oppn parties
GST: Why Impose Cess?

By Sunil Garodia
First publised on 2016-11-04 08:54:00

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.