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Finance Minister Arun Jaitley[/caption]
Finance Minister Arun Jaitely has annouced four slabs of GST, in which Panel has approved GST rates at 5%,12%, 18% and 28%.
The lowest rate of 5 per cent would be for common use items while there would be two standard rates of 12 and 18 percent under the Goods and Services Tax (GST) regime targetted to be rolled out from April 1, 2017.
Announcing the decisions arrived at the first day of the two-day GST Council meeting, Finance Minister Arun Jaitley said highest tax slab will be applicable to items which are currently taxed at 30-31 per cent (excise duty plus VAT).
Luxury cars, tobacco and aerated drinks would also be levied with an additional cess on top of the highest tax rate.
Jaitley announced the slabs in the GST council meet. Ahead of the GST council meeting he said that, "GST preparation is going on as per schedule".
"2 big items discussed-rate structure and compensation formula; and cross empowerment," jaitley said.
"Panel has approved GST rates at 5%,12%, 18% and 28%. Rate structure will be as follows: 1) Zero tax rate on food grain used by common people," he added.
"5% GST rate on items of mass consumption. Additional revenue from 28% slab will be used for 5% slab. 2nd will be 5% item; draft proposal said 6%,but we decided it’ll be 5% duty & these will be items of mass consumption used by common people," said Jaitley.
"Considering the inflation impact of having one standard rate, there’ll be 2 standard rates of 12% and 18%," he added.