Financial News

GST Rates Decided, 4-Slab Range from 5% to 28%

The Centre has decided a four-slab rate structure for the Goods & Services Tax, ranging from 5% to 28%, at a meeting of the GST Council on Thursday, to be come into force from April 1st, 2017.

At present, there are 15 to 20 tax slabs between the Centre and states. Coal, luxury and sin goods such as cigarettes and alcohol, will attract cess in addition to the GST.

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The GST Council had agreed to zero-rating for about half the items in the CPI (Consumer Price Index) in addition to food grains, while goods for everyday use would attract 5% GST, as against 6% proposed earlier’, said the Finance Minister Arun Jaitely.

Jaitely said that in place of the existing slab of 30 to 31% on products such as white goods, which comprises the excise duty of 12.5% and state VAT of 14.5%, the highest slab under GST will be 28%. The added advantage of 2% points that will accumulate to the government is being used to decrease the lowest slab from the proposed 6% to 5%.

Moreover, there will be two standard rates of 12% and 18%. White goods and similar products will attract 28% tax, in place of 26% suggested by the Centre earlier. The government proposed that the rate structure would be non-inflationary since rates on several items would come down. It hopes that the burden on the consumer would be minimized.