The GST Council on Thursday is believed to have finalised tax rates of up to 90 per cent of goods and services under the four-slab structure with essential daily use items being kept in the lowest slab of 5 per cent.
The Council, headed by Union Finance Minister Arun Jaitley and comprising representatives of all 29 states and three UTs in the opening session of the two-day meeting in Sri Nagar also approved rules for the Goods and Services Tax (GST) regime to start from July 1.
No official announcement was made today. But officials said up to 90 per cent of the items have been fitted in the 5, 12, 18 or 28 per cent brackets with the no further tax incidence on any of those items. The rates fitted are close to the present incience of excise duty plus VAT or service tax as the case may be. The Government wants minimum exemptions under the GST and only if it is essential.
States have made their own demands as Kerala seeks 5 per cent tax on gold under the GST regime and Adityanath, Chief Minister of UP has sought exemption of puja samagri’ instead of the proposed 18 per cent. The GST will be a national sales tax that will be levied on consumption of goods or use of services. It will replace central taxes like excise duty and service tax and state taxes like VAT and entertainment tax — creating India as one market with one tax rate.
GST is eagerly awaited and Reserve Bank has already called it a "game changer" with the view that the implementation of this comprehensive indirect tax is likely to ensure higher tax buoyancy and an improvement in government finances over the medium term.
The GST is a single tax on the supply of goods and services from the manufacturer to the consumer.