Finance commission group wants five GST exemptions

BS Reporter / New Delhi December 1! "##$! #%1# &ST

The Thirteenth Finance 'ommission(s tas)force on the propose* goo*s an* services tax
+GST, has recommen*e* a - per cent central GST an* . per cent state GST on all goo*s
an* services! except five specific categories/

&t has propose* a 0ero rate for exports though it is not in favour of an1 special
*ispensation for the special economic 0ones +S23s,/
For inter4state transactions! the tas)force! in its report! recommen*e* 0ero4rate* structure
through a*option of the mo*ifie* ban) mo*el/ 5en*ing constitutional amen*ment! the
report suggeste* that the collection from . per cent state GST shoul* accrue to the state
government an* *evolution to the thir*4tier +local, government shoul* be ma*e base* on
recommen*ations of state finance commissions/
The exemption list inclu*es public services of 6nion! state an* local governments!
service transaction between an emplo1er an* emplo1ee! unprocesse* foo* articles sol*
un*er the public *istribution s1stem! e*ucational an* health services provi*e* b1 non4
government schools! college an* agencies/
&t has favoure* *oing awa1 with area4base* exemption an* replacing it with *irect
investment4lin)e* cash subsi*1 in case the government wants to support in*ustr1 for
balance* regional *evelopment/
The tas)force has also recommen*e* that 7sin8 goo*s comprising emission fuels! tobacco
pro*ucts an* alcohol shoul* be sub9ect to a *ual lev1 of GST an* excise with no input
cre*it for excise/ 7:owever! in*ustrial fuels shoul* be sub9ecte* onl1 to GST with the
benefit of input cre*it li)e an1 other interme*iate goo*!8 the report sai*/
'entral taxes propose* to be subsume* in GST are central excise *ut1! inclu*ing
a**itional excise *ut1! service tax! a**itional customs *ut1! all surcharges an* cesses/
;mong state taxes that shoul* be subsume* are value a**e* tax! inclu*ing purchase tax
an* central sales tax! an* entertainment tax! among others/
&n recommen*ing what it terms as a 7flawless8 GST! the tas)force! hea*e* b1 ;rbin*
<o*i! 9oint secretar1! Department of Revenue! has ma*e wi*e variations from what was
propose* b1 the empowere* committee of state finance ministers in their first *iscussion
paper release* last month/
The *iscussion paper ha* recommen*e* a two4rate structure for both state GST an*
central SGT while )eeping the purchase tax levie* b1 states li)e 5un9ab! :ar1ana an*
6ttar 5ra*esh out of the purview of GST/
The *iscussion paper ha* recommen*e* a *ual rate structure for 'GST an* SGST with a
single rate for services/ The finance commission tas)force! however! sai* 7there shoul*
be no classification between goo*s an* services in law so as to ensure that there is no
classification *ispute8/
The state governments will meet tomorrow to *iscuss the fine contours of GST as the
sche*ule* *ate +;pril 1! "#1#, for its intro*uction *raws closer/
2ven in the case of exempte* items! the *iscussion paper *i* not list the items but
favoure* retaining the exempte* list of value a**e* tax an* 'entral =;T which is
currentl1 aroun* 1##/