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