The final roll-out of the Goods and Service tax is scheduled on July 1st and before that the Goods & Services Tax Council in a meeting on Friday in Srinagar chalked out the rules and tax rates for commodities and services. For goods like Gold, Textile, precious metals and footwear will be decided in the council’s meeting on June 3rd.
The telecom services will have to bear some extra burden with the tax rate increasing by 2%. The tax rate for telecom services now rests at 18% from its earlier value of 16%. In fact, the business class air travel would also face an increase. Only health and education sectors are to enjoy the exemption this year again.
At the end of the two-day meeting, Union finance minister Arun Jaitley told reporters, “There were set of services which were exempted at present. These exemptions will continue. Besides the exempted category of which one of the principal items will be health care and education as a class will be exempted,”
In a meeting on Thursday, the GST Council fixed tax rate for 1211 items.
From July 1 the prices of air-conditioners, televisions, and refrigerators will see a hike of 5 percent after the proposal of GST to fix the tax rate at 28% for all such commodities.
The council has set four different slabs of GST for luxury goods: 5 per cent, 12 per cent, 18 per cent (standard rate) and 28 per cent.
GST was introduced as a single rate tax nationwide but now it has 4 different slabs that range from 5 percent to 28 percent.
The rates are as per the slabs and there are certain basic items like eggs, milk, buttermilk, curd, natural honey, fresh fruits and vegetables, flour that are exempted.
Other essential items like tea, coffee, spices, etc. fall in the 5 percent bracket.
Some common use products which include picture books, sewing machines, umbrella, and others are under 12 percent tax bracket.
Whereas standard items like notebooks, steel products, printed circuits, camera, and speakers come under 18 percent slab.
All demerit goods and rich people’s item are categorized under 28% slab.
“I expected two or three slabs. The only unhappy situation that needs to be corrected in next Council meeting – while basic raw food is exempted, the same stuff when packed and branded, which is good for food safety and health will attract 18 per cent. This will need to be corrected. We can’t discourage food processing, food packaging so much. Overall, the rates send a positive sentiment, particularly for Aam Aadmi and d also for Urban Middle Class,” said former CBEC chief Sumit Dutt Majumder to DNA.
Finance Ministry Arun Jaitley acclaimed that the GST bill will be highly consumer-friendly.
He said that “mobile services will be charged at 18 per cent, but they will get input credit. So the tax incidence may occur at present or lower.”