Business Other News 19 Oct 2016 GST Council talks ab ...

GST Council talks about 4 slabs

DECCAN CHRONICLE.
Published Oct 19, 2016, 1:22 am IST
Updated Oct 19, 2016, 1:31 am IST
26 per cent tax likely for sin and luxury items.
Union finance minister Arun Jaitley shakes hands with Delhi finance minister Manish Sisodia during the 3rd meeting of the GST Council in New Delhi on Tuesday.(Photo: AP)
 Union finance minister Arun Jaitley shakes hands with Delhi finance minister Manish Sisodia during the 3rd meeting of the GST Council in New Delhi on Tuesday.(Photo: AP)

New Delhi: The Goods and Services Tax Council on Tuesday started discussion on the crucial issue of rates at which goods and services would be taxed under the GST regime across the country.

It discussed four-slab tax rate structure of 6 per cent, 12 per cent, 18 per cent and 26 per cent. The Arun Jaitley-led council, which has representatives from all states, started its three day meeting on Tuesday to thrash out pending issues on GST.

 

During the meeting, the lowest tax rate proposed was to be imposed on essential items and 18 per cent on most of the items. The highest tax rate of 26 per cent was reserved for luxury and sin products like tobacco.

FMCG and consumer durable products too were proposed to attract 26 per cent tax rate. However, it was proposed that additional cess will be imposed on luxury items, soft drinks and tobacco among others demerit items to provide Centre with funds to compensate states for loss of revenue due to implementation of taxes.
Most states had no problem on imposition of cess on such items.

 

Services are proposed to be taxed at 6 per cent, 12 per cent and 18 per cent. For services the highest tax rate is proposed to be 18 per cent and not 26 per cent.
Currently, services are taxed at 15 per cent after including cesses.

There will be no tax on agricultural products so as not to impose additional burden on the common man. It was proposed to exempt food items from GST.
It was also proposed that 50 per cent of the items of common usage be exempt from GST or taxed at six per cent to keep retail inflation under control. Gold was also proposed to be taxed at four per cent.

 

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