The Goods and Services Tax regime should set right the historical imbalances in fixing the Central and State tax rates, Finance Minister T.M. Thomas Isaac has said.
Inaugurating a session on GST organised by the Confederation of India Industry here on Friday evening, Dr.Isaac said debate was on regarding the rates to be fixed by the Centre and States under the new tax system.
“Any product in the country now has a tax burden of 30 to 35 per cent. This may be fixed at a range between 20 and 22 per cent. Differences of opinion are there on the empowered committee of State Finance Ministers on fixing the tax rate. The current tax incidence should be identified for fixing the rate. Unless the Centre decides to bring down the tax on maximum retail prices of goods, GST will be inflationary,” he warned.
‘Ready for new tax regime’
The State government’s IT infrastructure is ready to usher in the new tax regime. A new software with system scrutiny will be ready by next month. The State Assembly will pass a resolution on SGST by next month. Unlike the transition from Sales Tax to Value Added Tax, the switch over to GST will be smooth. The self-policing system will end acrimony over shop inspections. The new tax system will give a thrust to the State government decision to partner with the private sector for infrastructure development, mainly social infrastructure, he said.
