The Union Cabinet has approved amendments in the Customs and Excise Act relating to abolition of cesses and surcharges on various goods and services to facilitate implementation of GST.
Following this, the Centre will abolish 16 cesses and surcharges on union excise and service tax as it lays down the path for rolling out Goods and Services Tax (GST) from July.
The amendments in the Customs Act, 1962, allow furnishing of information relating to import or export of goods by specified persons to enable analysis and detection of cases of under or overvaluation in imports and exports.
Cesses to be abolished include Krishi Kalyan and Swachh Bharat. This would lead to a loss of about Rs 65,000 crore by the exchequer. To make up for this dent, the government would have to find resources from the budget.
“Amendments or repeal of various provisions of other Acts which will no longer be relevant consequent on rollout of GST will result in cleansing of the irrelevant portions from the Statute Book and reduce multiplicity of taxes,” an official release said after the Cabinet meeting chaired by Prime Minister Narendra Modi.
Earlier this week, the Cabinet had cleared four legislations for implementing GST as the government sprints to meet the July 1 launch schedule of the indirect tax reform, which can add up to 2 per cent to India’s economic growth.
The Bills on compensating states for any loss of revenue from the GST rollout in the first five years as well as those enabling levy of the new tax on intra- or inter-state movement of goods and services will be introduced in Parliament this week.