Goods and Service Tax rates: 83 services exempt, 13 in 5% slab
- Author: Zachary Reyes May 22, 2017,
May 22, 2017, 18:54
However, no consensus could be reached on the rate to apply on gold as well as beedi. Luxury cars will attract 28 per cent GST plus a cess of 15 per cent.
Telecoms and financial services will be taxed at a standard rate of 18 percent while transport services will be taxed at 5 percent, Jaitley said. With a tax levy of 28%, ACs and refrigerators are likely to get dearer. "Those who are opposing implementation of GST are actually against the people because consumers of the state have to give double tax".
Friday's meeting will also decide on the rate of tax for services, he said. Touted to be India's biggest tax reform since independence, GST will subsume all other indirect taxes on supply of Goods and services, right from manufacturer to consumer.
Jaitley further informed that there will be a 12 per cent service tax on non-AC restaurants and service tax in restaurants in five-star hotels will be same as that in ordinary hotels. These include a rate of zero for essential items such as grains, 5 per cent for mass consumption items like tea, commonly used products such as processed foods at 12 per cent.
GST for hotels with tariff above Rs 5,000 will be 28 per cent.
"In the existing tax regime, the cinema exhibition sector was exempted from service tax and state VAT (value added tax), and entertainment tax was the only tax imposed on cinema tickets by states and local bodies", he added.
While the rate proposed for cinema halls is lower than 40 to 55 per cent now, it may not result in a reduction in tariffs on cinema tickets as states continue to hold right to levy local charges on them. The GST will come into effect across the country from July 1 next.
On terrorists being funded from outside, Mr Jaitley said, it is aimed against Indian state, its sovereignty and people of Jammu and Kashmir.
Adding to this he said that the govt. has always encouraged environmentally friendly technologies and with the current focus on reducing emissions of greenhouse gases and reducing carbon footprint one would have expected the lower taxation to continue on such vehicles in a technology agnostic manner.
Seven per cent of the items fall under the exempt list while 14 per cent have been put in the lowest tax bracket of 5 per cent. On We need some more input on the pending issues.
Reacting to the announcements, industry said it may increase taxes for some stakeholders, but hoped to get benefits through the input credit system.