New Delhi: Biscuits, footwear and low-priced garments will get cheaper from 1st July as GST Council on Saturday fixed lower tax rates on them. However, gold and gold jewellery and branded packaged food items will get costlier as GST Council put them under high tax category.
At the meeting on GST, when asked about West Bengal refusing to pass state GST, finance minister Arun Jaitley said: “I am sure they will.”
Kerala Finance Minister Thomas Isaac said everybody has agreed for July 1 rollout”. However, West Bengal finance minister Amit Mitra said the rollout of the GST from July 1 will have “serious problems” and there is no harm in delaying its implementation by a month. To ensure that benefit of lower tax rates under GST are passed on to consumers and industry does not jack up prices, GST Council decided to set up an anti-profiteering committee which will take up complaints and recommend actions. The committee will have officials from Central revenue department and also some state-level officials.
The GST Council decide to bring gold and gold jewellery at 3 per cent tax rate under GST. Currently most of the states levy 1 per cent VAT on gold (except in Kerala, where the VAT is 5 percent) and Centre impose 1 per cent excise duty on it.
GST Council decided to tax biscuits at 18 per cent. Currently, overall tax incidence on biscuits prices below Rs 100 per kilogram is 20.6 per cent and above Rs 100 per kilogram is 23.11 percent. Footwear below Rs 500 will attract a 5 per cent GST and products above Rs 500 will be taxed at 18 per cent GST. Currently footwear below Rs 500 is taxed at 9.5 percent and above Rs 500 tax rate varies between 23.1 percent to 29.5 percent.
Finance minister said that packaged items of food, where food item is taxed at a zero rate, it was decided that those packaged items which were sold under registered trademark — as they are sold at much higher price and bought by different level of customers — will attract a GST rate of 5 per cent.
Made up apparel will attract 12 per cent GST but those below Rs 1,000 will attract 5 per cent GST. Officials said that currently apparel attract around 12 per cent taxes, so those below Rs 1,000 will become cheaper under GST.
As far as fiber is considered silk and jute will be exempt from GST. Cotton and natural fiber and yarn will attract 5 percent tax. However, man made fiber and yarn will attract 18 per cent taxation.
Tendu leaves has been kept at 18 per cent taxrate and bidi at the highest rate of 28 per cent. Unlike cigarettes, there will be no cess on bidi.
On CSD canteen run by defence services, where currently only excise duty is applied on the products sold and there is no VAT, it was decided that fully GST will apply on the products. However, Centre and States will refund 50 per cent of the GST back.
GST council on Saturday clarified that solar panel will be taxed at 5 percent and not 18 percent. Solar panel earlier were put in both 5 percent and 18 percent tax rate in GST. It was also clarified that sports equipment other than those used in gym will attract 12 percent tax and gym equipment will be under 28 percent tax rate.
Revenue Secretary Hasmukh Adhia said that for transition stock, the government will refund 100 per cent excise duty for goods costing above Rs 25,000, bears a brand name of the manufacturer and are serially numbered like TV, fridge or car chasis. “On all those items, even if it is coming through the dealer, the manufacturer will give the credit transfer document to the distributor and the distributor will be able to take 100 per cent credit for the big ticket items,” Mr Adhia said.
