The Indian GST is a very complex form of indirect tax. The discrepancies in GDP growth and per capita income growth meant that the One Nation One Tax Policy unfolded as a complex fabric of multiple tax slabs intertwined in a fabric of cess and other indirect taxes. The highest tax slab is 28% under GST.
And the Finance Ministers efforts of levying an additional Farmer CESS on the 28% luxury slab has not gone down too well with The Chamber of Trade and Industry (CTI). In a letter to Mr Arun Jaitley, the Finance Minister, the CTI expressed its concern over the proposed move. The CTI body believes this is against the basic rules of GST.
Brajesh Goyal, Convenor CTI, in his letter has cited media reports that suggest the central government is preparing to impose additional 5 percent farmer cess on the already 28% Luxury Slab of GST.
CTI Secretary General Ramesh Ahuja argues that the luxury slab subsumes goods like auto parts, two wheeler parts, cement, paints, washing machines, refrigerators, vacuum cleaners. These are used by common people too. Hence the possible impact is worth a reconsideration.
Levying a cess on all these things will make these products more expensive and the impact would be felt by the common man.
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