Question 11 – Draft-Bills-Reports – Frequently Asked Questions (FAQ) GST – FAQ [OLD] on Goods and Services Tax (GST) – (December 2015) – Question 11 – Q 11: Which Central and State taxes are proposed to be subsumed under GST? Ans: The various Central, State and Local levies were examined to identify their possibility of being subsumed under GST. While identifying, the following principles were kept in mind: • Taxes or levies to be subsumed should be primarily in the nature of indirect taxes, either on the supply of goods or on the supply of services. • Taxes or levies to be subsumed should be part of the transaction chain which commences with import/ manufacture/ production of goods or provision of services at one end and the con
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s Countervailing Duty (CVD) vi. Special Additional Duty of Customs – 4% (SAD) vii. Surcharges, and viii. Cesses. The following State taxes and levies would be, to begin with, subsumed under GST: i. VAT / Sales tax ii. Entertainment tax (unless it is levied by the local bodies). iii. Luxury tax iv. Taxes on lottery, betting and gambling. v. State Cesses and Surcharges in so far as they relate to supply of goods and services. vi. Entry tax not in lieu of Octroi. Purchase tax: Some of the States felt that they are getting substantial revenue from Purchase Tax and, therefore, it should not be subsumed under GST while majority of the States were of the view that no such exemptions should be given. The difficulties of the foodgrain producing Stat
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be allowed to levy excise duty on tobacco products over and above GST with ITC. Tax on Petroleum Products: As far as petroleum products are concerned, it was decided that the basket of petroleum products, i.e. crude, motor spirit (including ATF) and HSD would be kept outside GST as is the prevailing practice in India. Sales Tax could continue to be levied by the States on these products with prevailing floor rate. Similarly, Centre could also continue its levies. A final view whether Natural Gas should be kept outside the GST will be taken after further deliberations. Taxation of Services: As indicated earlier, both the Centre and the States will have concurrent power to levy tax on goods and services. In the case of States, the principle
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