Gearing up for the roll out of the goods and services tax regime, the Union Budget 2016-17 has introduced several procedural changes as well as brought in a number of sectors within the tax net, said Najib Shah, Chairman, Central Board of Excise and Customs.
A re-jig in the rates of service tax and excise duty would be possible only when a decision is taken by the proposed GST Council, he said.
“Before we revamp rates, the Constitution Amendment Bill has to be passed by Parliament and the GST Council needs to be set up. The Council will decide the rates,” he told BusinessLine.
Finance Minister Arun Jaitley was expected to announce a hike in service tax rates and bring the excise duty rates in sync for GST in the Union Budget that was presented on February 29.
However, he remained largely silent on the long pending indirect tax reform though the Budget announced amending the Cenvat Credit Rules, 2004, to improve credit flow and bringing sectors such as jewellery and branded ready-made garments in the tax net.
Chief Economic Adviser Arvind Subramanian in his report on possible revenue neutral rates for GST had suggested a standard rate between 17 per cent and 18 per cent for GST. But the report is yet to be examined by the Empowered Committee of State Finance Ministers.
Shah also said the model GST law that will be enacted by the Centre and States is still under discussion in the Empowered Committee and expressed hope that it will be finalised soon.
“The draft law is still under discussion and will be put out for public comments before it is finalised,” he said.
Though a new deadline for GST has not been announced, the CBEC is working on administrative and infrastructure preparedness for the new tax, he added.
The Finance Minister is expected to take up the Constitution Amendment Bill in the ongoing Budget Session of Parliament.