The Goods and Services Tax (Compensation to States) Bill provides for compensation to states for any loss of revenue from the implementation of GST.
The Compensation Law provides for a levy of cess on top of the peak rate of approved tax (28 per cent presently) on paan masala, tobacco, aerated water, luxury cars and coal to create a non-lapsable fund for compensating states for five years after the launch of GST.
This cess has a ceiling of 135 per cent in case of paan masala, Rs. 4,170 per thousand cigarettes sticks or 290 per cent ad valorem,Rss. 400 per tonne on coal and 15 per cent on aerated water and luxury cars.
An anti-profiteering measure in the bill provides for setting up an authority to examine whether input tax credits availed by any registered taxable person, or the reduction in the price on account of any cut in tax rate, has resulted in a commensurate reduction in the price of goods or services supplied by the person.
The law provides for arrest, ordered by a Tax Commissioner, in case of suppression of any transaction or evasion of tax.
A person convicted is punishable by up to five years in prison plus a fine.
The Compensation Law provides for a levy of cess on top of the peak rate of approved tax (28 per cent presently) on paan masala, tobacco, aerated water, luxury cars and coal to create a non-lapsable fund for compensating states for five years after the launch of GST.
This cess has a ceiling of 135 per cent in case of paan masala, Rs. 4,170 per thousand cigarettes sticks or 290 per cent ad valorem,Rss. 400 per tonne on coal and 15 per cent on aerated water and luxury cars.
An anti-profiteering measure in the bill provides for setting up an authority to examine whether input tax credits availed by any registered taxable person, or the reduction in the price on account of any cut in tax rate, has resulted in a commensurate reduction in the price of goods or services supplied by the person.
The law provides for arrest, ordered by a Tax Commissioner, in case of suppression of any transaction or evasion of tax.
A person convicted is punishable by up to five years in prison plus a fine.
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