Council finalises fitment of rates for 1200 items

TNN Bureau. Updated: 5/19/2017 1:30:11 AM

SRINAGAR: Food grains, milk, cereals, toiletries and a bulk of consumer items will get cheaper once the GST is implemented from July 1, 2017. The GST Council finalised fitment of rates for over 1200 items. It however, left rate for services and exemptions to be decided on Friday.
The Council, on the first day of its two-day meeting being held in Srinagar, decided that nearly one-fifth of all goods sold in India will be taxed below 18%, making most of the existing goods cheaper under GST, barring only a few which will cost more.
Talking to media after the meeting, Finance Minister Arun Jaitley said, "tax rates for many items have been reduced. With a better system in place tax buoyancy and compliance will be in place".
Jaitley said he is hopeful of finalising rates for all goods and services along with exemptions by Friday but kept the option open for one more meeting if tax for all items were not decided in one more day.

Revenue Secretary Hasmukh Adhia said only 19% of goods will be taxed at the rate of 18% while 81% of goods will be taxed lower.

He said sugar, tea, non-instant coffee, edible oil and coal will fall under 5% rate of tax, toothpaste, hair oil and soaps will be taxed at 18%. The current rate of taxation on toothpaste and soaps is close to 28%.

In a boost to industry, tax rates for capital goods and industrial intermediaries will be 18%.
The Council had earlier decided a five slab rate structure of 0%, 5%, 12%, 18% and 28%.
Most of the luxury goods and sin items were expected to fall in the 28% bracket. It was earlier assumed that small cars will have a lower tax rate than 28% but finance ministers of states attending Thursday's meeting said there is likely to be no discussion on lowering of rates for small cars.
The Council approved seven GST rules required for its roll out. The remaining two rules related to transition and return were being vetted by the legal committee, the finance minister said.


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