GST Tax Rates announced. Commonly used items attract lower tax.

GST rates announced. Commonly used products to get lower tax.

November 05, 2016
Knowledge is free. Please Like & Share

GST rates announced. Commonly used products to get lower tax.

The Indian Government announced the biggest reforms revolution to avoid various anamolies in the taxation structures. Now, Rates with a 4 tier structure has been finalized with rate structures of 5%, 12%, 18% & 28%. These rates were decided by GST Council chaired by Union Finance Minister Arun Jaitley with other Minister of State in charge of revenue and state finance ministers.

“Essential items gets lower tax, Luxury Items & De-merit attract the highest tax & might also attract cess after that”

Food @ 0% Tax :

Food products that are inflation sensitive have been given high priority which attracted less tax rate @ Zero Rate such as food grains & it is constitute half of the consumer inflation basket.

Common Items Slabs:

Commonly used items otherwise mass consumption will attract the less 5% tax. Revenue shortage that is occurring from this category will be compensated from the good that are taxed at 28% slabs.

Most of the goods that are taxed currently will be falling under the category of 12% & 18%. The GST Council & secretaries will meet in upcoming time to fix the item wise tax rates and will be ruled out to the purpose by April 2017.

Luxury & Demerits gets luxury in tax as well:

Cars, Tobacco & aerated drinks will attract 28% tax and might attract cess with highest of the tax rate. Luxury cars may even get higher tax. However, the panel said that additional cess will not be levied on the states or consumers to avoid the burden.

Revenue Loss & Compensation:

The panel also said that cess collected would act as compensating revenue for the loss of revenue in the states for the first five years of implementation of GST.

The Union Finance minister said that fifty thousand crore will be required to compensate to the state’s revenue loss after the GST Implementation.

Knowledge is free. Please Like & Share

No comments

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.