GST Council Finalizes the Rates for Goods and Services
Posted on: 2017-06-30 03:15:27
The two-day GST Council meeting held in Srinagar on May 18-19, 2017, saw participation from states and union territories along with Shri Arun Jaitley and senior officials from the revenue department.
An officers’ panel over the last six weeks had been working towards the fitment and classification exercise – an exhaustive list specifying the tax rate of goods and services, which was presented at the council meeting.
The Council had earlier agreed on a four broad slab structure i.e. 5, 12, 18 and 28 percent. The GST Council meet saw final conclusion on the rates of goods and services under Goods & Services Tax regime.
Few key takeaways include:
Tax on GOODS:
- 81% items out of 1211 items, to be taxed at below 18% under GST
- A list of 7 per cent of the total 1,211 items has been exempted, 14 per cent of the items are in the 5% tax slab, and 17 per cent of total items are 12% tax slab. About 43 per cent of the items will attract 18% tax rate, while only 19 per cent will be in the 28% tax slab.
- Milk, cereals (unpackaged and unbranded), food grains, fruits, vegetables and jaggery to be exempt
- Items like “Puja Samagri” shall be subject to nil rate of GST
- Normal sugar, tea, coffee and edible oil and coal have been placed in the 5% tax slab
- Medical devices, smartphones to be subjects to 12% tax slab
- Soap, toothpaste, hair oil, chemicals will be taxed at 18%
- Consumer durables, packaged cement to attract 28%
- Footwear under Rs. 500 will be taxed at 5% and all other types would be taxed at 18%
- Tendu leaves will be taxed at 18% while bidis will be taxed at 28%
- Biscuits would be taxed at 18%
- Solar panel to be taxed at 5%
- Gold, silver and processed diamond to be taxed at 3% while rough diamond would be at 0.25%
- Two slab rate for agriculture equipment i.e. 5% and 12%
- The textile industry sources to be taxed at 5% under GST
Tax on SERVICES:
- Healthcare and education services to be exempt
- 5 % on car aggregators like OLA and UBER as well as advertisements
- Rail, road and air transport to be taxed at 5%
- Telecom insurance and financial services to be taxed under 18%
- Tax on services like 5 star hotel, race club betting and cinema to be 28%
GST Council also approved rule relating to Registration, Refund, Payment, Valuation, Composition, Invoice and Input Tax Credit.