The GST council on Thursday approved four main tax slabs 5%,12%, 18% and 28% under a proposed Goods and Services Tax (GST), Finance Minister Arun Jaitley told reporters. While there will be two standard tax rates – 12 percent and 18 percent – under the GST, half of the items in the consumer price index would not be taxed at all to safeguard the interests of the poor, Jaitley said after the meeting of the GST council.
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The lower rates is for essential items and highest band for luxury goods. Jaitley said that the preparation for GRT roll out is as per schedule.
Jaitleys aid that zero-tax rate will be applied to 50 pc of items in CPI basket, including foodgrains used by common man.
Earlier this month, the panel had decided that base year for calculating the revenue of a state would be 2015-16 and secular growth rate of 14 per cent would be taken for calculating the likely revenue of each state in the first five years of implementation of GST.
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States getting lower revenue than this would be compensated by the Centre.