Mr. Arjun Ram Meghwal, The Union Minister of State for Finance and Corporate Affairs mentioned that the Government will not allow increase of incidence of indirect taxes on manufacturing products under the Goods and Services Tax (GST) regime, while speaking at an event organised by the Calcutta Chamber of Commerce in Kolkata. He explained while a standard GST rate will come into effect, the slab-based rates for different manufacturing products will still remain into existence during the transition period, i.e. before moving gradually towards the single tax rate regime.
“Under the GST regime, the indirect tax rate on services will rise, but for manufacturing sector we will not allow indirect tax rate to go up from the present level because we want progress of programmes like Make in India, Digital India, Stand Up India. There will a be standard rate of GST and we are planning to bring slab-based rates. There will be exemptions also”, said Mr. Meghwal. He assured manufacturers that the indirect taxes will not go up drastically after the implementation of GST.
Mr. Meghwal mentioned that slab-based rates are necessary to protect manufacturing sectors belonging to low tax brackets. “Some sectors like Bikaner Papad where tax is just one per cent, how will these industries survive if a single standard rate of about 18 percent or 17 percent is applied,” he said.
Mr. Meghwal also pointed that liquor and petroleum products are not under the GST ambit currently and indicated that the Government will review the position after one year of implementing GST. The GST council will examine Product-based and location-based exemptions.