GST rules in place, first list of goods and rates is out

Coming down hard on tobacco, cigarettes and cars, the Council decided on the cess rates for demerit and luxury items.

Written by Aanchal Magazine | Srinagar | Published:May 19, 2017 4:37 am
GST, GST regime, goods and service tax, taxation, GST council meeting, tax slab, Arun Jaitley, food tax, pan masala tax, gutkha taxation, cigarett tax, indian express news, india news, business news Finance Minister Arun Jaitley. PTI photo

AIMING TO keep most items, especially those of mass consumption, at affordable prices, the states and the Centre evolved a consensus on the first day of the 14th Goods and Services Tax (GST) Council meeting on Thursday to keep 81 per cent of a total of 1,211 items at the modal tax rate of 18 per cent or below.

The Council also gave final approval to seven rules pertaining to registration, payment, refund, invoice debit, credit note, input tax credit, valuation, and composition scheme — essential prerequisites for the industry to gear up for the transition to GST. Two rules on transition provisions and returns have been sent for legal vetting.

Read | Rates for 6 items to be finalised; no levy on milk, bread, cereals

Foodgrains, including cereals and jaggery, have been exempted with a zero per cent tax slab, while essential items of normal sugar, tea, coffee and edible oil have been placed in the 5 per cent tax slab. The GST on items such as toothpaste, soap and hair oil will be 18 per cent as against the present total tax incidence of 28 per cent and above.

Coming down hard on tobacco, cigarettes and cars, the Council decided on the cess rates for demerit and luxury items. A cess of 204 per cent has been proposed for pan masala gutkha; cigarettes not exceeding 65 mm will attract a cess of 5 per cent plus Rs 1,591 per thousand.

Small petrol cars with an engine capacity of less than 1200 cc will attract 1 per cent cess, and those with a diesel engine capacity of less than 1500 cc will attract 3 per cent cess.

Large cars with an engine capacity greater than 1500 cc, and SUVs with a length of more than 4 m and engine capacity greater than 1500 cc, will attract a cess of 15 per cent.

Motorcycles with an engine capacity of more than 350 cc will attract 3 per cent cess and an equal amount of levy will be applied on aircraft for personal use and yachts.

A decision on the tax rate for six categories of items, including gold, beedi, textile, footwear, agricultural implements and packaged/branded food items, was kept in abeyance and is likely to be taken up for discussion on Friday.

During the course of Thursday’s meeting, some states objected to the categorisation of all packaged/branded food items in the 5 per cent category, considering flour, especially wheat flour, is an item of mass consumption, said a state finance minister.

Also, some states raised concerns regarding the impact of categorisation of items in the tax slabs of zero, 5 per cent, 12 per cent, 18 per cent and 28 per cent on their respective revenues, another state finance minister said, adding that there are concerns among states whether these rates are revenue-neutral or not.

Speaking to reporters, Union Finance Minister Arun Jaitley said, “Tax rate under GST will not go up for any of the commodities. There is no increase. On many commodities, there is a reduction particularly because the cascading effect of tax on tax is gone. Several commodities, we have consciously brought down the tax. In the overall basket, there would be a reduction but we are banking on the hope that because of a more efficient system, evasion would be checked and tax buoyancy would go up. That, despite reduction the revenue neutrality and tax buoyancy thereafter would be maintained.”

Revenue Secretary Hasmukh Adhia said that about 7 per cent of the total 1,211 items have been exempted, 14 per cent of the items are in the 5 per cent tax slab, 17 per cent of total items are in 12 per cent tax slab. About 43 per cent of items will attract 18 per cent tax rate, while only 19 per cent will be in the 28 per cent tax slab, he added.

Citing the crucial role of coal in power and industrial production, Adhia said, the tax rate on coal has been reduced significantly to 5 per cent from the existing tax incidence of 11.69 per cent. The cess on coal, which was earlier decided by the Council to be levied at Rs 400/tonne, will continue to be imposed and the collections would flow into the compensation fund, he added.

During the course of the meeting, many states presented region-specific proposals. J&K proposed to keep handloom and handicrafts in the zero per cent category, a demand which was supported by north-eastern states. Uttar Pradesh proposed that cotton yarn, silk yarn, puja material be exempted under the GST regime.

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  1. P
    Pawan Kumar Arora
    May 27, 2017 at 9:48 am
    Item Rates on Stationery items, Hosiery & Readymade Garments are not Cleear.
    Reply
    1. P
      Pawan Kumar Arora
      May 27, 2017 at 9:47 am
      Item Rates of Stationery goods , Hosiery & Readymader Garments.
      Reply
      1. A
        Ashutosh V Divecha
        May 20, 2017 at 11:59 am
        Government is not keen on affordable HOUSING for all it seems as GL PAINT CEMENT GL and such items are in the HIGHEST 28 rate.
        Reply
        1. A
          Aadis
          May 20, 2017 at 10:41 am
          This Government is making life difficult for common people .
          Reply
          1. T
            THATHAMAN
            May 19, 2017 at 11:10 pm
            GOOD NEWS! NO GST FOT GAU MUTHAR AND COW DUNG TOO. ALSO NO GST FOR WATER( UN BOTTLED) AIR . GOVERNMENT IS THINKING OF ABOLISHING GST ON SAFFRON CLOTHS TOO. JAI HO
            Reply
            1. S
              Sk
              May 19, 2017 at 9:06 pm
              Thanks for exempting GST on water,( other than mineral water, miniral water will attract 18 percent GST )
              Reply
              1. B
                Banoj Hazarika
                May 19, 2017 at 5:46 pm
                important information
                Reply
                1. P
                  Parth Garg
                  May 19, 2017 at 2:09 pm
                  This complex law encompassing a wide variety of taxes would be beyond the small tax payer and would hit them hard. All penalties and fines should be condoned for a period of six months from introduction of GST. Consumers have never been taken into confidence in forming this new law affecting them the most. Pity!
                  Reply
                  1. J
                    Joginder songh
                    May 19, 2017 at 1:23 pm
                    Who is deciding the price off product's that should be first decided. What should be the price off the product then only you can add the Tax on to the product.
                    Reply
                    1. A
                      Ashutosh V Divecha
                      May 19, 2017 at 12:54 pm
                      comment deletes words and lines typed as it wishes - any webmaster to check this ????
                      Reply
                      1. A
                        Ashutosh V Divecha
                        May 19, 2017 at 12:54 pm
                        to Government projects should be at ZERO TAX - Is there any sense in moving money from one pocket of the Government to another ? Governments development projects spending on Cement Steel Petrol Diesel and many items which due to these heavy taxes sounds like heavy costs of the projects.
                        Reply
                        1. A
                          Ashutosh V Divecha
                          May 19, 2017 at 12:49 pm
                          Housing, roads and infrastructure depends on materials like CEMENT and GL which has been taxed @ 28 - Does this Government intends affordable housing and roads for the poor ?
                          Reply
                          1. A
                            Ashutosh V Divecha
                            May 19, 2017 at 12:50 pm
                            CEMENT AND GLASS
                            Reply
                          2. P
                            PARKASH CHANDRA
                            May 19, 2017 at 12:31 pm
                            I KNEW WHAT WOULD BE DONE TO MY COMMENT?
                            Reply
                            1. P
                              PARKASH CHANDRA
                              May 19, 2017 at 12:30 pm
                              QUOTE: GST RULES IN PLACE FIRST LIST RELEASED: One more channel has been created for Traders to Cheat customers. It has taken four years to enact it. One tenure of Government has been consumed on meetings and visiting Kashmir. Without Prejudice.
                              Reply
                              1. I
                                Indian
                                May 19, 2017 at 12:29 pm
                                LOOTING PUBLIC through TAXES to pay GOVT OFFICIALS who treat public like SLAVES should end. .................... Reduce DEFENCE SPENDING too. All the PLANES, GUNS, SHIPS, MISSILES etc purchased after 1971 have never been used in war but are being dumped to buy more when only AK47 is being used to fight terrorist.
                                Reply
                                1. M
                                  mediahater
                                  May 19, 2017 at 10:05 am
                                  Seems that Arun Jaitley does not brush and bathe ! That is why he is taxing a high 18 for tooth paste and oil!!! Keep it up chamcha!!!
                                  Reply
                                  1. F
                                    Fauxall
                                    May 19, 2017 at 11:34 pm
                                    Jaitley I hope is born as a Gujrati in next life. I certainly don't want a Punjabi to be a mindless chamcha. Capt Amarinder called him a fake Punjabi he is one,
                                    Reply
                                  2. V
                                    vijay
                                    May 19, 2017 at 10:04 am
                                    This is the beginning of Ache Din
                                    Reply
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