Group of Ministers Current Affairs

GoM recommends uniform road tax structure for vehicles across country

The Group of Ministers (GoM) constituted by Union Ministry of Road Transport and Highways has proposed One Nation One Tax policy for seamless movement of commercial vehicles across the country. The two day meeting of GoM held in Guwahati, Assam was attended by transport ministers from Uttar Pradesh, Assam, Himachal Pradesh, Bihar, Goa, Kerala, Haryana, Chhattisgarh, Meghalaya and Jharkhand. The GoM is headed by Rajasthan transport minister Yoonus Khan.

Recommendations of GoM

Uniform road tax for vehicles across states: It will allow transfer of vehicles from one state to another without levying road tax. It will put check on people registering their vehicles in low tax states and running them in other states. It will also bring necessary relief to genuine cases requiring transfer of vehicles.

Tax Structure: Centre has the powers to decide principles on which  motor vehicles tax can be levied. The uniform tax should be based on invoice price of vehicles in three slabs. 8% tax on vehicles below 10 lakhs, 10% for vehicles costing between 10 -20 lakh, and 12% for vehicles above 20 lakh. Diesel vehicles may have to pay 2% extra taxes, while electric vehicles will be given 2% discount.

National passenger vehicles permit for passenger cars: There should be national bus and taxi permit on lines of such permit for goods transport. It will give the much needed fillip to public transport and help reduce road congestion and its attendant problems.

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GST council constitutes GoM to review GST Composition Scheme

The GST Council has constituted a Group of Ministers (GoM) to make the composition scheme more attractive and revisit the goods and services tax rates on restaurants. It will be headed by Assam Finance Minister Himanta Biswa Sarma and submit its report in two weeks.

Committee’s role

It will examine steps to make it more attractive as only 15.50 lakh businesses out of total 98 lakh have registered under GST regime opting for composition scheme. Businesses with turnover of up to Rs. 1 crore can opt for composition scheme and pay taxes in range of 1-5% and file returns quarterly.

It will look into whether turnover of exempted goods can be excluded from total turnover threshold for levying tax under scheme. It will examine whether scheme can be extended to taxpayers dealing in inter-state supplies of goods and whether the manufacturers opting for it can be given the benefit of input tax credit.

It is also been tasked to revisit tax structure of different categories of restaurants in order to rationalise or reduce rates. Currently, GST is levied at 12% on non-AC restaurants and 18% on air-conditioned ones. It will examine whether AC restaurants pass on benefit of cost reduction under GST to consumers and if they don’t, whether they be disallowed input tax credit claims.

Composition scheme

It is an alternative method of levy of tax designed for small taxpayers whose turnover is up to Rs 75 lakh (Rs 50 lakh in case of 8 north-eastern states and hilly state of Himachal Pradesh). Its objective is to bring simplicity and reduce compliance cost for small taxpayers. It is optional under which manufacturers other than those of pan masala, tobacco and ice cream products have to pay 2% tax on their annual turnover. The tax rate is 5% for restaurant services and 1% for traders.

As per Central GST Act, businesses are eligible to opt for composition scheme if person is not engaged in any inter-state outward supplies of goods and not into making any supply of goods through e-commerce operator who is required to collect tax at source.

While regular taxpayer has to pay taxes on monthly basis, composition supplier is required to file only one return and pay taxes on a quarterly basis. Composition taxpayer is not required to keep detailed records that normal taxpayer is supposed to maintain.

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