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India finalises tax rates for goods and services

Reuters  |  NEW DELHI 

By Manoj Kumar

(Reuters) - on Thursday finalised rates that will apply to different goods and services under a new sales which aims to roll out from July 1.

A panel comprising central and state finance ministers fixed the rates for over 1200 items under the Goods and Services tax, amid demand by some states to keep essential items under the lower category.

"Out of 1,211 items, rates on all except six categories have been decided," Finance Minister told reporters after a meeting in Srinagar, the capital of Jammu and Kashmir.

The panel will discuss rates for gold and some other items on Friday and could meet one more time if necessary to decide rates on remaining items.

Under the new tax, rates will range from 5 to 28 percent, with 12 percent and 18 percent being the standard rates. Most raw food items including milk will be exempted from while the panel still has to finalise rates for processed food items.

Some food items like coffee and edible oil will be taxed at a rate of 5 percent, Revenue Secretary Hasmukh Adhia said. Coal will be taxed at 5 percent along with a levy of 400 rupees per tonne.

The long-awaited Goods and Services (GST) is hailed as India's biggest overhaul since independence in 1947. It will replace a slew of central and state levies, transforming Asia's third largest economy into a single market.

The council also approved most of the draft rules relating to the new that would push businesses to upgrade their infrastructure for filing returns under the new system.

"Several process related changes can now be undertaken as the passage of the rules has paved the way for the introduction of the most significant reform in India," said M.S. Mani, senior director at Deloitte Haskins & Sells LLP.

(Reporting by Manoj Kumar; Editing by Ed Osmond)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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