Srinagar, May 18
The 14th Goods and Services Tax (GST) Council meeting today has finalized 5 per cent to 28 per cent tax on about 90 per cent goods, official sources said.
They said essential items of daily use were being kept in the lowest bracket of 5 per cent while highest is 28 per cent. Sources said that the meeting, chaired by Union Finance Minister Arun Jaitley and attended by Finance ministers of all states and Union Territory besides other senior officials, deliberated in details to finalise the tax rates under GST.
The GST Council approved rules for the Goods and Services Tax (GST) regime that is scheduled to kick in from July 1st in the country. About 90 per cent of the items have been fitted in 5, 12, 18 or 28 per cent brackets, sources said adding the fitments have been done in a way that there is no increase in tax incidence.
They said that rates close to the present incidence of excise duty plus VAT or service tax has been considered to be the rate under the GST.
The complete details of the rates decided by the council are likely to be available once at the end of the meeting tomorrow, on the concluding day of the two-day meeting here.
However, a number of finance ministers from different states sought exemption on items like silk yarn, puja material and handicraft items, sources said.
Uttar Pradesh sought zero levy on ‘puja samagri’ instead of the proposed 18 per cent.
Kerala Finance Minister Thomas Isaac made a case for 5 per cent tax on gold under the GST regime instead of 1 per cent being demanded by some quarters as he felt that the precious metal is not an essential commodity.
A few others recommended only two rates for service tax – 12 per cent and 18 per cent–. However, the GST will be a national sales tax that will be levied on consumption of goods or use of services.
The GST will make India one market with one tax which will replace 16 current levies – seven central taxes like excise duty and service tax and nine state taxes like VAT and entertainment tax.
France was the first country to implement the GST in 1954. Since then, Germany, Italy, the UK, South Korea, Japan, Canada and Australia have been among the doznes of nations which have implemented the GST. China implemented GST in 1994 while Russia did it in 1991. Saudi Arabia plans to do it in 2018. India will also now join select nations
The GST is a destination-based single tax on the supply of goods and services from the manufacturer to the consumer and is one indirect tax for the entire country.
After implementation of the GST a number of essentials, including Dal will become cheaper.