Guwahati, May 8 (PTI): Assam Finance Minister Himanta Biswa Sarma today introduced a new bill and proposed to bring in a five-tier tax structure by eliminating the existing duties in the state.
Introducing The Assam Goods and Services Tax Bill, 2017, Sarma said a tax structure of zero per cent, five per cent, 12 per cent, 18 per cent and 28 per cent have been finalised apart from a special rate for luxury goods.
“With a view to keeping inflation under check, essential items including food which presently constitute roughly half of the consumer inflation basket will be taxed at zero rate.
“The lowest rate of five per cent would be for commonly used items, while there would be two standard rates of 12 and 18 per cent under GST.
“Luxury cars, tobacco and aerated drinks would also be levied with an additional cess on top of the highest tax rate,” he added.
The collection from this would create a revenue pool which would be used for compensation to states for any loss of revenue during the first five years of implementation of GST.
“For the purpose of paying GST compensation, a fixed/secular growth rate of 14 per cent on the revenue for the base year 2015-16 on compounded annual growth rate (CAGR) basis shall be taken.
“Compensation payable to the states in any financial year will be the difference between the projected revenue for that financial year and actual revenue collected during that financial year,” Sarma said.
Further, revenue forgone due to industrial concession will be a part of revenue for the purpose of calculating GST compensation, he added.
The minister said the Assam GST Bill will subsume existing Assam VAT Act, 2003 (except petroleum products and liquor), Assam Entry Tax Act, 2008, Assam Amusement and Betting Tax Act, 1939, Assam Tax on Luxuries (Hotels, Lodging Houses and Hospitals) Act, 1989 and Assam Health Infrastructure and Services Development Fund Act, 2009.
“GST will bring about paradigm shift in the entire indirect tax system by replacing plethora of indirect taxes levied by both Centre and States with a single tax and will create unified national market, which would facilitate free movement of goods and services across the country,” Sarma said.
The Assam Goods and Services Tax Bill, 2017 will be taken for discussion and passage on May 11 in the assembly, which has been convened for a three-day special session from today.
