The CEA-led panel report on GST revenue neutral rate (RNR) is likely to be submitted on Friday. The finance ministry had set up a committee to be headed by Chief Economic Advisor (CEA) Arvind Subramanian to look into possible tax rates under GST. Sources say the likely recommended rate won't be higher than 18 percent. The panel will suggest the likely GST rate based on RNR.
The CEA panel may also recommend concessional, lower, standard and higher GST rates. Sources suggest cigarettes, luxury cars and beverages may have a higher GST rate. Precious metals on the other hand may be taxed at a concessional GST rate. Essential goods and services may also be taxed at a lower GST rate.
As far as the passage of the Bill is concerned, the central government is leaning on Bihar chief minister Nitish Kumar to garner support. Kumar has spoken to top BJP leaders on the GST Bill.
Additionally, former prime minister Manmohan Singh also sees merit in not incorporating a GST rate in the Bill. The Congress has been demanding that GST rate be incorporated in the Bill.
However, sources suggest that the government may yield on doing away with additional 1 percent inter-state manufacturing tax.
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