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GST Council & GST rate slabs

Anandaday Misshra, Advocate 
on 20 October 2016


On 18th October 2016, the Central Government has proposed various rate slabs in GST Council. It must be noted that the GST Council is meeting from 17th - 19th October 2016 to finalise GST rate slabs, Cess & concessions along with compensation to various states.

GST Rate Slabs - The proposed GST rates are as below :

  • 6% - Food items and other necessities.
  • 12% - Substantial Goods & Services 
  • 18% - Rest Of Goods & Services 
  • 26% - Luxury goods 
  • 4%- Precious metals like gold.

Cess
Additionally, Cess has been proposed for demerit goods included selected luxury cars, tobacco, pan masala etc towards compensation to states.

Crucial Discussions
The following crucial discussions also hint a lot on GST rate structure :

a. Concept of High GST Rate Limit - Highest Rate Limit Proposal @ 30% came from Kerala Finance Minister Thomas Issac with a condition that  state government can either  exempt or levy lower tax rates even highest slab is fixed.

b. Food Items - Special treatment to certain food items is likely to continue and it will be exempted from the tax as well.

c. Common Usage - 50 percent of the items of common usage will be exempted. This will be also a measure to check inflation. 

Average GST Rate For Goods & Services

  • Goods - Average GST rate seems to be @ 6% & 12%. Whereas, FMCG products shall attract GST rate @ 26%.
  • Services - GST rate may be @ 12% or 18%. 

The author can also be reached at anand@amlegals.com 


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