Source: News Bharati English03 Nov 2016 17:29:44
New Delhi, Nov 3: After a marathon meeting on the issue the Goods and Services Tax (GST) Council has finalised the four-tier tax rate structure on Thursday. The rate structures are decided between 5 percent and 28 percent. The four-tier rate structure is fixed at 5, 12, 18 and 28 percent.
Finance Minister Arun Jaitley who chaired the meeting said that zero tax rate would be applied to 50 percent of items in the Consumer Price Index basket including grains used by the common man.
The two-day meeting of the GST Council began here on Thursday and accepted the four-tier tax rate structure with some tinkering of the proposal of the Central Government.
Finance Minister Jaitley said: “We have been able to finalise the GST rate structure. Zero-tax rate to apply to 50 percent of items in the Consumer Price Index basket, including grains used by the common man. Five per cent duty will be levied on items of mass consumption used by common people
“'Two standard rates of 12 and 18 per cent will be there in GST. Items taxed at 30-31 per cent [excise plus VAT] will be taxed at 28 percent. Additional revenue from highest tax slab to be used to keep essential use items at 5 per cent and transferring common use items to 18 percent.
“Luxury cars, tobacco, aerated drinks to be levied with a cess, which along with clean energy cess, will be used to compensate States for loss of revenue. Compensation pool created through cess will be for five years. Rs. 50,000 crore is required to be paid to States for loss of revenue in the first year of GST rollout.”
The Centre had proposed the tax structure at 6, 12, 18 and 26 percent, the peak rate being for fast-moving consumer goods and consumer durables.