Nation

GST to provide more relief to purchases from CSD

June 19, 2017 04:50 AM

CHANDIGARH: While veterans in Haryana are anxious about the impact of the Goods and Service tax (GST) on the items available through the canteen stores department (CSD), officials of state excise and taxation department have predicted that things would either remain unaffected or get cheaper.

Other household requisites like soap, toothpaste, detergents items, which would be taxable at 18% under the GST, would have effective tax rate of 9% when sold to CSD. There will be no excise duty so the overall levies are likely to be reduced by 7.7%.

While liquor is already out of the GST purview, other items, especially automobiles and other AFD (against firm demand) items may see a reduction from 2.7% to 7.7% in taxes. The state, however, would continue to levy VAT on liquor.

Haryana is one of the states with largest number of military veterans with around 2.82 lakh ex-servicemen, 1,232 war widows, 83,250 widows, apart from serving personnel. In Haryana, the privilege of tax exemption is also applicable to the paramilitary forces' canteens on the lines of CSD. 

Explaining the impact of GST on CSD items in Haryana, finance minister Captain Abhimanyu said that in the automobile sector, rate of tax under VAT on supplies to CSD was 4.2% and thus, CSD enjoyed a benefit of 8.9%. Under GST regime, there will be no excise duty. The tax shall be levied at the effective rate of 14% plus cess if any. Abhimanyu, himself an Army veteran, said that automobiles supplied through CSD were expected to see a reduction of 2.7% or even higher.

"Similarly, the items like television, washing machine, refrigerators, ACs, microwave ovens, cosmetics, perfumery and wristwatches, which will be taxed at 28% in the GST, will have an effective tax rate of 14% when supplied to the CSD. There will be a reduction of levies on these items to the extent of 2.7%," Abhimanyu said in a note prepared by his department on the issue 

Other household requisites like soap, toothpaste, detergents items, which would be taxable at 18% under the GST, would have effective tax rate of 9% when sold to CSD. There will be no excise duty so the overall levies are likely to be reduced by 7.7%.

The Union finance ministry has already explained that the burden of 50% concession on supplies to CSD shall be born both by the Centre and the state equally.

 

 

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