The Goods and Services Tax
(GST) Council on Saturday cleared the pending rules for the rollout of the new indirect tax regime from July 1. The include transition provisions and returns. All states have agreed to the July 1 rollout timeline. "Transition rules have been cleared and everybody has agreed for July 1 roll out," Kerala Finance Minister Thomas Isaac told said.
Finance Minister Arun Jaitley
chaired the 15th meeting of the GST
Council, where the rates of tax and cess on gold, biscuits, footwear and textiles were decided.
Finance Minister Arun Jaitley
explained the math of GST
rate. Here are the highlights:
* Packaged food items sold under registered trademarks to be taxed at 5 per cent.
on Agri machinery fixed at 5 per cent
on apparel below Rs 1,000 fixed at 5 per cent: Arun Jaitley
* A nominal rate of 0.25 imposed on rough diamond: Arun Jaitley
* 0 per cent tax on Jute: Arun Jaitley
Council will set up committee to look into complaints regarding anti-profiteering clause, said Arun Jaitley
* Bidi to be taxed at 28% without cess. However Beedis are still under discussion, no proposal of cess for beedis: Arun Jaitley
rate for gold fixed at 3 per cent: Arun Jaitley
* Gold, gems, jewellery to be taxed at 3 per cent: Arun Jaitley
* Footwear priced below Rs 500 to be taxed at 5%, the rest at 18%: Arun Jaitley
* Readymade garments to attract 12% GST; Yarn and fabric cotton 5 per cent: Arun Jaitley.
(Natural yarn to be taxed at 5 per cent, man-made yarn at 18 per cent)
on all biscuits to be 18%: Arun Jaitley
*Consumers might also see some hike in garment prices
Council had last month fixed the rates for over 1,200 goods and 500 services -- at the slabs of 5, 12, 18 and 28 per cent.
Isaac's statement about all states agreeing to the July 1 rollout assumes significance as West Bengal Chief Minister Mamata Banerjee had earlier said her state would not roll out the new indirect tax regime in its present form.
West Bengal Finance Minister Amit Mitra, however, attending Saturday's meeting.
Banerjee had said on Friday that her government would not support the new GST
system in its present form and that her government would write to Jaitley seeking changes to make the tax regime suitable for all the sections of the society.
"We will not support the GST
in its present form. In its present form, it doesn't suit every section, especially the unorganised sector. They (Centre) have to rectify it... We have to continue our fight to bring down the tax rates on certain products.
"Unless the rates are reduced, they will adversely impact the state's economy and employment," she had said.
As for the transition rules approved by Council, the industry had been demanding some relaxation of the provision of deemed credit.
The draft transition law provided that once GST
is implemented a company can claim credit of up to 40 per cent of their Central GST
dues for excise duty paid on stock held by businesses prior to the rollout.
Several dealers are choosing to wait and watch rather than buy and hold on to inventories. They have lobbied with the government seeking an increase in the credit limit.