In a 2 day deliberations in New Delhi beginning today, Government has finalised a 4-tier tax structure ranging from 5% to 28% under a proposed Goods and Services Tax (GST) with some tinkering of the Centre’s proposal.
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Gst rates decided, 4 slabs ranging from 5 to 28%
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GST Rates Decided, 4 Slabs Ranging From 5 To 28%
The new GST or Goods and Services Tax will range from 5 to 28 per cent in a four-bracket structure,
Finance Minister Arun Jaitley said today.
#DigitalErra Thought Corner
In a 2 day deliberations in New Delhi beginning today, Government has finalised a 4-tier tax structure
ranging from 5% to 28% under a proposed Goods and Services Tax (GST) with some tinkering of the
Centre’s proposal.
Earlier, a paper submitted to the GST Council highlighted the pain points in the GST Bill. It demanded to
remove anomalies across various segments before the roll out of the Bill.
Here are the 10 latest developments in this big story that has come out yesterday:
1. The rate and scope of the long-delayed tax has been agreed upon today by the powerful GST
Council, which consists of Mr Jaitley and his counterparts from different states.
2. The four GST slabs have been set at 5%, 12%, 18% and 28% for different items or services.
3. The brackets are steeper than the rates of 6, 12, 18 and 26% earlier proposed by the government.
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4. The peak rate of 28% will apply to luxury goods. GST for tobacco products will be fixed at the
level of cess that these products attract now.
5. The Finance Minister pointed out that the average is lower than the 18% demanded by the
opposition, in particular by the Congress.
6. Service Tax will go up from 15% to 18 %,said Revenue Secretary Hasmukh Adhia.
7. The tax rate agreed upon today must be now be approved by parliament, which meets from
November 19 for the winter session.
8. Parliament has to pass two bills related to GST in the winter session to be on track to roll out of
the new indirect tax regime from April 1 next year.
9. Fitment or categorization of items for each slab will be done by officials and will then be
approved by the GST council, Mr Jaitley said.
10. GST does away with indirect levies charged when goods cross state lines and unifies India into a
single market.
GST will replace multiple layers of indirect taxation levied by various states. It will be critical
to how SMEs view their sourcing and trading needs. Arun Jaitley will require parliamentary
approval for bills later this month that would set the rate and scope of the GST. Also, state
assemblies must back similar bills for the tax to enter force as planned next April 1.