New Delhi: Ahead of the two-day Goods and Services Tax (GST) Council meet that is scheduled to begin here on Thursday, industry body CII suggested that the rate of 18 per cent should be applied to most of the goods and services.
The Council which met last on October 18-19 had failed to reach a consensus on the critical issue of GST rates.
"It is important that the bulk of goods and services should fall within the standard rate of 18 per cent and only as exception to go to the higher rate of 26 per cent. It is suggested that the higher rate of 26 per cent should apply only to 'demerit goods' and the term luxury goods should not be used to define this category," Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII) said.
The industry understands that the present situation does not allow the possibility of having a single GST rate and therefore, a beginning needs to be made with multiple rates, he said.
"The GST should begin with an absolute limit of four rates as suggested by the government, and over time, the government should commit to converging these four rates to one or two rates," Banerjee said.
"The Goods and Services Tax (GST) Council meeting discussed the issue relating to different rates of tax. Rates also depend on source of funds, on the basis of which compensation to losing states will be funded. Decision on a rate structure is possible once this is decided," Jaitley had said after the meeting on October 19.
The technical issues will be sorted out and a formal decision on GST rates will be announced at the next meeting, Jaitley, who chairs the GST Council, had said.