Under GST, there will be no VAT and the cesses, too, are supposed to be subsumed within the zero per cent GST. “Today, there’s virtually no private grain trade because nobody can afford to pay 10 per cent tax, on top of other charges,” pointed out Ghai. The second effect of zero per cent GST will be to induce more food processing industries in Punjab. Half of this amount, which is the VAT portion, may be compensated by the Centre through a formula guaranteeing a yearly 14 per cent tax revenue increase. But zero GST on agricultural produce is still a big deal.

Source: Indian Express May 24, 2017 20:56 UTC