Cabinet drops 1% additional tax on inter-state sales for GST bill
The Cabinet has dropped the 1% additional tax on inter-state sales as proposed in the Goods and Service Tax (GST) bill. It has passed this amendment in GST bill, according to sources said an ANI alert.
The cabinet also approved the decision to compensate States fully for 5 years for the losses due to the GST.
The cabinet has accept to raise foreign direct investment (FDI) limit to 15% from 5 % in stock or commodity exchanges.
These decisions came after the Empowered Committee of State Finance Ministers meeting with Finance Minister Arun Jaitley to take into account some of the demands of the States for the passage of GST bill. This comes as the government looks to get enough support for the bills passage in the Rajya Sabha.
The meeting didn’t decide on the rate of tax but the state governments said the tax rate shouldn’t be too high for citizens and don’t harm state revenues.
The state finance ministers agreed that GST tax rate shouldn’t be part of constitution but should be itemized in an act or a rule.
The cap on the GST was something that the Congress Party has been pushing for, however many of the other opposition parties have not been so keen on it.
The state finance ministers also said that the GST rate should not be so much that the State loses revenues.