advertisement
The Goods and Services Tax (GST) Council has decided rates for around 1,150 items out of the total of 1,211, Finance Minister Arun Jaitley said on Thursday. The rates for remaining goods will be discussed and finalised on Friday, he said.
Here’s a breakup of the goods falling under the various tax slabs:
Sugar, tea, coffee, sweets and edible oil will fall under the 5 percent tax bracket, said Hasmukh Adhia, financial services secretary, Ministry of Finance. Coal will also be taxed at 5 percent, as opposed to the current incidence of around 10 percent.
Goods such as hair oil, toothpaste and soaps will fall in the 18 percent category.
All capital goods and industrial intermediates will also fall in the 18 percent bracket and this will help bring down inflation, Jaitley said.
However, MS Unnikrishnan, managing director of energy and environment engineering company Thermax, said the GST rate of 18 percent for capital goods is a “negative, given that the companies now pay an inter-state tax of 14.5 percent, which would be a burden either on these companies or consumers”.
But for the companies which manufacture and sell in the same state, the rates stands substantially reduced from 24-25 percent, he said.
Cereals, milk and jaggery will be exempted from any tax. The rates for gold, beedi, cigarette, agricultural implements, footwear, textiles and biodiesel have not been decided yet, he said.
Haryana’s Finance Minister Captain Abhimanyu too said that “from what I know, cars are going to be taxed at 28 percent”.
RC Bhargava, chairman of India’s largest carmaker Maruti Suzuki Ltd, said that a 28 percent tax rate on small cars is very similar to the existing rate, and will not have a significant impact. The industry is still seeking clarity on the rate for bigger cars, he said, adding that he has heard reports about an additional cess.
Rates on services have also not been finalised yet, according to Manish Sisodia, Deputy Chief Minister of Delhi.
The council approved seven rules in Thursday’s meeting in Srinagar for input tax credit, valuation, composition scheme, registration, invoices, payments and processes. The legal committee is working on the remaining two relating to transition provision and returns, Jaitley said.
The council on 7 April passed the five GST bills – Central GST, State GST, Integrated GST, Compensation Bill and the Union Territories GST.
The blanket tax system is expected to be rolled out from 1 July. However, some company leaders believe that a July implementation seems unrealistic with most of the small and medium businesses still not registered on the GST Network.
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)