NEW DELHI: Currently, sericulture, floriculture, dairy, horticulture, fishing that usually employ outside labourers on a large scale are exempt from service tax as they come under agriculture. But whether these will attract tax under GST is still debatable.
“Those who are dealing in anything except what we have defined as ‘agriculturalist’ will have to register (under GST). But whether their products are taxable or not will have to be decided by the Council,” he said.
“We have not yet decided on the exemption list. That will be decided separately by the Council, I don’t think it will want to tax many agriculture products,” Adhia said.
He also said that some services which currently have less than 15 percent tax rate may attract lower rates.
“Wherever the services at present attract lower than 15 percent rate of service tax because of certain reasons, we will try to maintain that. Transport sector, for example, attracts lower than 15 percent tax right now. We will put these in either 5 percent or 12 percent,” he said.
The Revenue Secretary also noted that since petrol and petroleum products have been kept zero-rated under the GST regime, transport can be a good candidate for 5 percent tax rate.
The GST Council had decided to impose tax at four slab rates of 5 percent, 12 percent, 18 percent and 28 percent, apart from the zero tax level.
Currently, there are about 60 services which are exempt from service tax, including education, healthcare and religious pilgrimage.
In terms of goods, Adhia said that whatever is the exact incidence of excise plus VAT, the fitment will be into a tax slab closer to that. But depending on whether the goods are put in the higher slab or the lower slab, the taxes may increase in a few cases.
“Most of the items will be as per formula, only a few items will need discussion. In a few cases, the taxes may increase, but not in all cases. Every year, the Council will meet and revise rates,” he said.
Though the GST Council took 13 meetings to decide on the enabling laws, Adhia said that since fitment of goods and services is a straightforward thing, it should not take too much time.
The Council is slated to meet on May 18-19 in Srinagar to decide on GST Rules, after which the fitment discussions will be taken up.
Adhia said that the government is determined to roll out the GST regime from July 1 despite some industry stakeholders demanding further postponement of the new tax regime.
“We are determined to roll out GST from July 1, it doesn’t seem to be a problem. The live testing of GST is scheduled to begin from first week of May,” he said.
Adhia agreed that GST will have a greater compliance burden as companies having physical presence in more than one states need to do multiple registrations and pay taxes separately to each state.