Service tax rate left untouched; GST outreach programme to be launched

Business Standard By BS Reporter February 1, 2017. 14:06 IST

Currently, services are taxed at 14%. After cess, it works out to around 15%

On road to goods and service tax (GST), Finance Minister Arun Jaitley on Wednesday refrained from making any major changes in the indirect tax regime.

He did not go for the much-expected increase in service tax rate to align with GST. Currently, services are taxed at 14%. After cess, it works out to around 15%.

He said the government would launch an outreach programme with industry from April 1, 2017. Though Jaitley did not give any date for the roll-out of the new regime, M S Mani, senior director, indirect tax, Deloitte Haskins & Sells LLP, said: “The reaffirmation of the Governments focus on GST was very reassuring and it now appears that the country is all set to move to GST from July 1.”

Mani said the absence of any major changes in excise and service tax confirms that we are "definitively moving" to GST from July 1, 2017. “The emphasis on GST groundwork already done in the FM’s speech including specific steps taken and proposed and the absence of any major changes in Excise and Service tax is a clear indication that we are going to see GST in India from 1st July 2017”.

He said businesses which had put GST preparation on the backburner will now need to undertake a crash course in getting GST ready as its introduction is imminent from July 1.

GST will subsume central and state levies like excise duty, service tax and VAT. The tax slabs so far are 5, 12, 18 and 28%.

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