Hailing as the biggest reform since India’s independence, Goods and Services Tax is scheduled to be rolled out from July 1. The all-powerful GST Council on Thursday finalised tax rates for the bulk of the items. The council decided not to impose the tax on commodities of everyday use.
The GST rates for 1205 items out of 1211 were finalised at the first day of the two-day meeting in Srinagar of the GST Council, headed by Union Finance Minister Arun Jaitley and comprising state representatives.
- Milk and curd will continue to be exempt from taxation when GST replaces current indirect taxes. ‘Mithai’ or sweets will attract 5 per cent levy.
- Daily food items like sugar, tea and coffee and edible oil will attract the lowest tax rate of 5 percent.
- Prices of foodgrains, especially wheat and rice, will come down as they will be exempt from GST.
- Seven percent of the items fall under the exempt list while 14 per cent have been put in the lowest tax bracket of 5 percent. Another 17 percent items are in 12 percent tax bracket, 43 percent in 18 percent tax slab and only 19 per cent of goods fall in the top tax bracket of 28 percent.
- Coal will attract GST of 5 per cent as against the current tax incidence of 11.69 percent.
- ACs and refrigerators will fall in the 28 percent tax slab while life-saving drugs have been kept at 5 per cent rate.
- On gold, states demanded a 4 per cent tax even though the rate is not among the 5, 12, 18 and 28 percent approved bands.
- On top of the peak rate, small cars will attract a 1 per cent cess, mid-sized cars will attract 3 per cent and luxury cars 15 per cent.
- Aerated drinks and cars will be in the 28 percent bracket.
- As many as 81 percent of the items will attract 18 per cent or less GST.
Source: Economic Times