India finalises GST rates
- Author: Leroy Wright May 28, 2017,
May 28, 2017, 6:23
The Goods and Services Tax (GST) Council, in a meeting conducted on May 18, 2017, determined the tax rates for nearly 1,211 items with a maximum of them falling in the category of 18%.
The GST Council on Friday finalised tax rates for services under the GST regime, scheduled to be rolled out from July 1. Overall, it is expected that the GST rates will make many things cheaper for the common man.
Small cars will be charged 1 per cent cess on top of 28 per cent tax, mid-sized and luxury cars will attract cess of 15 per cent on top of the peak rate.
After months of waiting, there is finally a clarity on what essential goods and services will cost under the new tax regime with the GST Council deciding what commodity will fall under which basket after a two-day meet in Srinagar. The Council made a decision to keep 81% of a total of 1,211 items at the modal tax rate of 18% or below.
Refrigerators and ACs will attract a levy of 28%, whereas the life-saving drugs will fall in the 5% tax slab.
Capital goods, a basic requirement in the manufacturing sector, will be taxed at a rate of 28%.
Transport services will be taxed at 5%. Healthcare and education will be exempted from GST.
"The services have been split into 12 and 18 per cent and some 5 services into 28 per cent category", he said. Currently, some states levy Value Added Tax (VAT) on them.
Out of the 1,211 items, the GST rate for all but six was decided on the first day, he said.
"The government has done well to ensure stability in taxation while at the same time moderating the taxes wherever they were too high", added Dasari while expressing his delight over the new taxation rates. A total of 7% of goods have been kept zero rated.
"Services will have the same four multi-slab structure of tax rates as for goods", he said.
The unified tax system would put the tax of the SUVs and luxury vehicle in the brackets of 43 percent, comprising 28 percent tax bracket and 15 percent of maximum cess.
The government should realise countries like myanmar, thailand, singapore, Indonesia and others levy taxes ranging from 5 to 10 per cent. India can not afford to have these kind of complex and high GST, HRAWI President Dilip Datwani said.
"GST regime will usher in lower taxes, seamless input tax credit, logistics savings and market share swings from unorganized to organized players", said Aditya Narain, Research head at Edelweiss Securities Ltd.
Coal will attract GST of 5% as against the current tax of 11.69%.