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GST Council finalises tax rates on 80-90% goods, services

The GST will be a national sales tax that will be levied on consumption of goods or use of services

Press Trust of India  |  Srinagar 

Jaitley was of the view that there should be minimum exemptions under the GST and should be provided for only if it is essential, a government official said.

The Goods and Services Council on Thursday finalised rates on 80-90 per cent of goods and services under the four-slab structure with essential items of daily use being kept in the lowest bracket of 5 per cent. The Council, headed by Union Minister and comprising representatives of all states, in the opening session of the two-day meeting also approved rules for the regime which will come into effect on July 1. Official sources said that 80-90 per cent of the items has been categorised in 5, 12, 18 or 28 per cent brackets. The fitments, they said, have been done in a way that there is no increase in incidence.

So rates close to the present incidence of excise duty plus VAT or service has been considered to be the rate under the The complete details of the rates decided are likely to be available by tomorrow. Various state ministers sought exemption on items like silk yarn, puja material and handicraft items. Jaitley said that there should be minimum exemptions under the and should be provided for only if it is essential, a government official said. Prior to the meeting, Kerala Minister Thomas Isaac made a case for 5 per cent on gold under the regime instead of 1 per cent being demanded by some quarters as he felt that the precious metal is not an essential commodity. Yogi Adityanath-led Uttar Pradesh sought zero levy on 'puja samagri' instead of the proposed 18 per cent. A few others are keen on only two rates for service tax; 12 per cent and 18 per cent. The will be a national sales that will be levied on consumption of goods or use of services. It will replace 16 current levies, namely, seven central taxes like excise duty and service and nine state taxes like VAT and entertainment tax; thereby creating India as one market with one rate. With the GST, India will join select League of Nations with a goods and service France was the first country to implement the in 1954. Since then, Germany, Italy, the UK, South Korea, Japan, Canada and Australia have been among the over a dozen nations which have implemented the China implemented in 1994 while Russia did it in 1991. Saudi Arabia plans to do it in 2018. Last week, the Reserve Bank called the a "game changer" and said given the cross-country experience and empirical evidence on efficiency gains from the Value Added (VAT) in the Indian context, the implementation of this comprehensive indirect is likely to ensure higher buoyancy and an improvement in government finances over the medium term. The is a destination-based single on the supply of goods and services from the manufacturer to the consumer and is one indirect for the entire country.

First Published: Thu, May 18 2017. 15:57 IST