GST Council to meet on May 18; exemptions on Telangana agenda

Hyderabad: The TS government wants clarity on the items that will be exempted from GST in the crucial GST Council meeting to be held in Srinagar on May 18 and May 19.

Finance minister Etala Rajender, along with commercial taxes principal secretary Somesh Kumar and commissioner V. Anil Kumar left for Srinagar on Wednesday.

The meeting assumes significance in the backdrop of finalisation of tax slabs for various goods and services under GST.

The GST Council had earlier decided on a four-tier tax structure of 5, 12, 18 and 28 per cent. Besides there will be an additional slab that includes cess on luxury items.

However, no decision has been taken on which goods and services fall under which tax slab. Both the Centre and states are flooded with requests from various industry and trade bodies seeking either GST exemption for some goods and services or lower tax rates.

The TS government too has received several representations from industries, educational institutions, hospitals, film industry etc seeking exemption or lower tax.

At present, under VAT regime, the Centre exempts 299 items, while the states kept 99 items out of the tax net.

However, Union finance minister Arun Jaitley has been insisting on downsizing the list to less than 100 as exempting or lowering taxes for such a large number of items would defeat the very purpose of GST regime.

The government also wants the Centre to give clarity on how state governments could extend tax benefits to attract industries under GST regime.

At present, states have the provision to extend various tax exemptions, rebates, subsidies for industries, which is not possible under GST regime due to uniform tax rates across the country.

The government also wants clarity on the fate of tax concessions already given to various industries for a period ranging from 5 years to 10 years and how they could be extended for the remaining period in the new tax regime.