Proposed GST rates on sugar, tea lower

The proposed Goods and Services Tax (GST) rates on sugar, tea, coffee (other than instant coffee) and milk powder will be much lesser than prevailing taxes, the Finance Ministry said on Thursday.

"Sugar attracts specific central excise duty of Rs 71 per quintal, plus cess of Rs 124 per quintal, which translates to ad valorem rate of more than 6 per cent. Including incidence on account of CST, octroi, and entry tax, the present total tax would work out to more than 8 per cent. The proposed GST rate on sugar is only 5 per cent -- that is 3 per cent less," a Ministry statement said here.

"Tea and coffee attract nil central excise duty and VAT (value-added tax) rate of 5 per cent. Considering embedded taxes in production of tea and coffee and the incidence on account of CST, octroi and entry tax, the present total tax works out to more than 7 per cent," the statement said.

The proposed GST rate for tea and coffee (other than instant coffee) is only 5 per cent.

Similarly, milk powder attracts nil central excise duty and 5 per cent VAT. Considering embedded taxes in production of milk powder and incidence on account of CST, octroi, and entry tax, the present total tax incidence works out to more than 7 per cent.

The proposed GST rate on milk powder is only 5 per cent, it said.

--IANS

mm/tsb/dg