Finalisation of tax rates
- Tax rates of 1,211 items (except six) have been fixed. The items falling under different tax rate slabs are given below.
|
Percentage of total items |
No. of items (approximate) |
Tax slab |
|
7% |
85 |
Exempt |
|
14% |
170 |
5% |
|
17% |
210 |
12% |
|
43% |
520 |
18% |
|
19% |
230 |
28% |
- Key items which would be exempt under GST are:
- Milk;
- Cereals (branded cereals are under deliberation and may be shifted to the 5% slab); and
- Jaggery.
- Key items which would be under the 5% tax slab (essential
goods) are:
- Sugar, tea, coffee (except instant coffee);
- Edible oil (under deliberation and may be added in the list of exempt goods);
- Coal (tax under the existing system is 11.69%); and
- Mithai.
- Key items which would be under 18% tax slab are:
- Hair oil, toothpaste and soap (tax suffered under existing system is 28%);
- Capital goods; and
- Industrial intermediates.
- Luxury cars are to be taxed at 28% plus cess.
- A decision on the rates of small cars below INR 1 million is likely to be taken tomorrow.
- As per a statement given by the Finance Minister, the rates on all goods have been reduced in GST vis-a-vis the effective tax under the current tax structure.
- The rate of tax on services is to be decided in tomorrow's meeting.
Finalisation of Rules
- Seven Rules have been finalised by the GST Council.
- The Return and Transition Rules are still under examination by the legal team.
SKP's comments
- It appears that the majority of essential commodities would be included in the exempt or 5% tax slab. An exhaustive list of items under different tax rates is expected to be decided and released tomorrow.
- The industry should be able to finalise decisions placing reliance on the Rules which have been confirmed by the Council.
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