oppn parties GST: Why Impose Cess?

News Snippets

  • The government will make new IT rules to make it mandatory for platforms to provide traceability of content
  • PM Modi says India striving to move to evidence-based policy making by 2022
  • Patna High Court says that courts are clogged with cases against prohibition in the state
  • NCP-Congress say unanimity reached on government formation in Maharashtra, talks with Sena today
  • Surrogacy Bill referred to 23-member select committee by the Rajya Sabha
  • Government has asked the IITs to follow the quota system in hiring faculty
  • Gujarat police say self-styled godman Nithyanand has fled the country
  • Muslim parties are split over seeking review of the Ayodhya verdict
  • Indian skipper Virat Kohli says the pink ball could pose a lot of challenges due to its weight, hardness and colour
  • India to play its first pink-ball Test match against Bangladesh from Friday at the Eden Gardens in Kolkata
  • In reply to a question in Parliament, the government says it is empowered to lawfully intercept, monitor or decrpyt information stored in a computer resource in the interest of sovereignty or integrity of India
  • Police stop a 12-year old girl on her way to the Sabarimala shrine
  • In Karnataka, the JD(S) indicates that it might support the BJP government if it falls short of numbers after the bypolls
  • Congress pips the BJP in local body elections in Rajasthan, winning 961 wards to the BJPs 737
  • After Airtel and Vodafone-Idea, Jio also indicates that tariffs will be raised from December
Perfect start for India in the first pink-ball Test. Bangladesh skittled out for 106 runs while India make 174 for 3 in reply. Ishant Sharma took a fiver
oppn parties
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.