Lok Sabha Question No. 584 (UNSTARRED), answered on 2016-11-18
Subject: FICCI and ASSOCHAM Proposal on GST
Ministry: FINANCE
Asked by: KULAMANI SAMAL

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK    SABHA UNSTARRED QUESTION NO. 584

TO BE ANSWERED ON FRIDAY, THE 18 TH  NOVEMBER, 2016 27 TH   Kartika, 1938 (SAKA)

## FICCI and ASSOCHAM Proposal on GST

584. DR. KULAMANI SAMAL:

Will the Minister of FINANCE be pleased to state:

- a)  whether the Federation of Indian Chambers of Commerce and Industry (FICCI) has suggested the Government to have a standard rate of 18 per cent of GST, if so, the details thereof and the reasons therefor;
- b)  whether the Government is considering the proposal put by FICCI, if so, the details thereof;
- c)  whether  the  Associated  Chambers  of  Commerce  and  Industry  of  India (ASSOCHAM) has called for a relaxation in the provision in respect of penal and prosecution in the first two years after roll out of GST except in case of tax fraud and non-deposit of collected taxes;
- d)  if so, the details thereof along with the action taken by the Government thereon;
- e)  whether the Government proposes to have single and centralized registration of suppliers of services operating across various States in the country; and
- f) if so, the details thereof?

## ANSWER MINISTER of STATE IN MINISTRY OF FINANCE

## (SHRI SANTOSH KUMAR GANGWAR)

- a)  No. The Federation of Indian Chambers of Commerce and Industry (FICCI) has recommended GST rates ranging from zero to 12 per cent for different types of industries  through  an  e-mail  dated  1 st   November,  2016.  The  details  are  at Annexure A.
- b)  The GST rate structure of 5%, 12% (Standard Rate 1), 18% (Standard Rate 2) and 28% has been recommended by the GST Council, in its meeting held on 3-4 November, 2016.
- c)  & d) No. ASSOCHAM has not suggested any such relaxation.
4. (e) & f) As per article 279A(4)(c) of the Constitution, the GST Council shall make recommendations to the Union and the State on model GST laws, which will include details of the proposed registration process under GST.

## ANNEXURE - A

|   S. No. | Industry                                                                                                                                                                  | Recommended Rate       | Reason                                                                                   |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|------------------------------------------------------------------------------------------|
|        1 | Paper and Paper Board Industry                                                                                                                                            | 10%.                   | To control the price                                                                     |
|        2 | Pharmaceutical and nutritional industry                                                                                                                                   | 10 -12%                | Essential goods                                                                          |
|        3 | Food Processing                                                                                                                                                           | Lowest Tax Bracket     | To control the price as the ITC benefit is limited to this sector.                       |
|        4 | Hydrocarbons                                                                                                                                                              | Zero/ Nominal Tax Rate | To curb inflationary impact on the economy                                               |
|        5 | Gold Bullion and Jewellery                                                                                                                                                | 1%                     | To discourage smuggling and to decrease tax avoidance and price control                  |
|        6 | Medical Devices and Diagnostics Industry                                                                                                                                  | 10%                    | Essential goods                                                                          |
|        7 | Membranes for Water Purifier                                                                                                                                              | Lower Rate             | To minimize the impact on the consumer.                                                  |
|        8 | Insecticides                                                                                                                                                              | Lower Rate             | To minimize the impact on the farmer.                                                    |
|        9 | Seeds                                                                                                                                                                     | Exempted               | To minimize the impact on the farmer.                                                    |
|       10 | Pesticides                                                                                                                                                                | Exempted               | To minimize the impact on the farmer.                                                    |
|       11 | Petrochemicals                                                                                                                                                            | Merit Rate             | To curb inflationary impact on the economy                                               |
|       12 | Betel Nut                                                                                                                                                                 | 2-6%                   | Agricultural goods                                                                       |
|       13 | Duty Free Stores                                                                                                                                                          | Zero rated             | Being an export from the airport and earns Foreign Exchange                              |
|       14 | Kerosene wick stove and parts thereof                                                                                                                                     | Exempted               | To be used by the BPL families.                                                          |
|       15 | Services like Healthcare, Education, Sea Transportation of LNG by vessel, Services supporting food processing, Real estate, Film/ Cinema Exhibition Trade, R &Dactivities | Zero-rated/ Exempted   | Services are rendered to the consumer and tax on these services will affect the consumer |