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With less than a month to go for the implementation of the Goods and Services Tax (GST), States are likely to seek a lower rate on items such as gold, footwear and biscuits at the GST Council meeting here on Saturday.
Sources said that States are likely to call for a four per cent rate on gold under GST but will also seek input tax credit, which in effect will halve the rate.
Similarly, for biscuits, footwear and textiles, many States are keen to have differing tax slabs — lower rates for cheaper biscuits and footwear and five per cent GST for textiles.
“At present, there is a wide variation in the taxation of each of these commodities, with differently priced items being taxed at differing rates,” said an official, adding that there was a view that to tax them all at the same level may not be fair for consumers.
For instance, in the last round of meetings in Srinagar, many States had called to exempt biscuits costing less than ₹100 per kilogram while the Centre wanted to levy a 12 per cent tax on it. The GST Council in its meeting on May 18 and 19 had fixed the rates of over 1,200 goods and 500 services in the four-tier tax structure of five, 12, 18 and 28 per cent.
But it could not reach an agreement on the rates to be levied on six commodities, including agriculture equipments, biscuits, textiles, footwear, bidis and bidi wrapper leaves (tendu patta) and precious metals, including gold. A decision is expected in Saturday’s meeting, along with a finalisation of GST on lottery and packaged and branded food items.
Additionally, the Council, chaired by Finance Minister Arun Jaitley, will finalise draft GST rules on transition provisions and returns that were being vetted by the legal committee.
It will also review the preparedness of the GST Network that will provide the IT backbone for the new tax levy.
However, casting a shadow on what was being seen as one of the last round of discussions before the GST roll-out, some States may also call for a review of the target launch date.
Sources said the Centre and most States are still keen for a July 1 rollout, while some other States are apprehensive about the administrative preparedness. States like West Bengal and Delhi have already sought a re-look.
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