Union Finance Minister Arun Jaitley on Wednesday said the rate structure for Goods and Services Tax (GST) will be decided in the next meeting of the GST Council on November 3-4. He further added, “We have converged towards a consensus, announcement will be made after next GST Council meeting. Two standard rates of 12 per cent and 18 per cent under discussion.” An informal consensus was reached at the end of the two-day meeting of the GST Council on a four-slab tax structure of 6, 12, 18 and 26 per cent. The lower tariff will be for essential items and the highest bracket for luxury and sin goods like tobacco, cigarettes and alcohol, but a decision was put off to the next meeting.
On tax structure, Jaitley said, “We cannot under-tax or over-tax to keep rate slabs minimum.” The attempt, he said, was to fit zero rated items while levying a 6 per cent tax on items that are currently charged 3-9 per cent tax. “We will finalise the tax structure at the next meeting,” he said.
Once the GST rates are decided, the GST Council will meet again on November 9-10 to finalise the draft legislations, he said.
In a meeting that was held on Tuesday, Revenue Secretary Hasmukh Adhia had told reporters that around 70 per cent of the taxable base is proposed to be taxed at either 18 per cent, 12 per cent or 6 per cent, with more than 50 per cent of the items to be taxed at 12 per cent or 18 per cent. Ultra-luxury items like high-end cars and demerit goods like tobacco, cigarettes, pan masala and aerated drinks, comprising about 25 per cent of the taxable base, would attract an additional cess over and above the higher rate of 26 per cent.
Adhia further added that the collections from the proposed cess on luxury or demerit supplies over and above the higher tax slab are estimated to be around Rs 50,000 crore, out of which around Rs 26,000 crore will be collected through clean environment cess.
(With PTI inputs)