Govt finalises GST rates, revises earlier slabs

GST Council fixes lower rate at 5 per cent with two standard rates of 8 and 12 per cent and a higher rate of 28 per cent.

Mumbai

: The GST Council headed by Finance Minister Arun Jaitley today finalised the new Goods and Services Tax rates in the range of 5 per cent and 28 per cent. Two standard rates of 8 per cent and 12 per cent have also been finalised.

Earlier, a four-tier tax structure of 6, 12, 18 and 26 per cent was proposed under the One India One tax regime.

Finance Minister Arun Jaitley while briefing the media said that there will be two standard rates of 12 per cent and 18 per cent. The lower rate will now be levied at 5 per cent while the higher rate which was earlier fixed at 26 per cent will be levied at 28 per cent.

The panel has also approved a cess on tobacco products, luxury and sin items. The higher tax rate of 28 per cent has been decided for aerated drinks, pan masala luxury cars, tobacco. \"Cess will not be additional charges and it will be reviewed on year-to year basis,\" Jaitley said.

Apart from that, the decision on GST rate for gold has been put on hold.

Finance Minister Arun Jaitley also informed that goods of mass consumption have been put under the purview of 5 per cent GST rate. \"Transferring several items to 18 per cent tax bracket from the 28 per cent,\" Jaitley said.

In the first very first year of GST roll-out, Rs 50,000 crore corpus will be required to compensate states for the revenue loss, he added.

Now that the rates have been decided, the government will now form a committee of secretaries that will take a decision on items and under what category they would fall.

Presently, most of the white goods are taxed at 30-31 per cent rate which would under the new GST regime be taxed at the new higher tax rate of 28 per cent, Jaitley said.

The GST Council formed to decide and implement the pan-India taxation has the Union Finance Minister as its head and state Finance Ministers as its members.