Moving a step closer to the rolling out of the Goods and Services Tax (GST), the apex body, the GST Council today signed off on all rules relating to GST.
As the Government is all set to implement GST, the most awaited indirect tax reform in India from July 2017 onwards, the two-day meeting began in Srinagar to finalise the nuts and bolts of the new tax framework.
The Counsel has cleared nine rules deal with registration, return, refund, composition, transition, invoice, payment, input tax credit, valuation.
It almost finalized the items for which ‘nil’ and 5% rates of GST are to be levied. This is done according to the suggestions specifically made by the Sates. Out of 1,211 items, rate of a few items are almost finalized by the Council.
While milk will be exempted from GST, foodgrains will be cheaper, said, Revenue Secretary Hasmukh Adhia. He also added that items like hair oil, soap, tooth paste etc to attract 18 per cent tax.
GST rate on coal fixed at 5 per cent against current incidence of 11.69 per cent; sugar, tea, coffee, edible oil to also attract 5 per cent tax, Mr Adhia said.
An official privy to the Council discussions said there were 10 agenda items for the day’s meeting and that all of them were approved. “We discussed two schedules relating to nil rate and 5% rate, out of the seven schedules on goods and services,” the official added, on condition of anonymity.
As per the agenda fixed by the Council, services are to be taxed at 12% and 18%, and the goods are to be taxed at five slabs of 5%, 12%, 18%, 28% and 28% plus cess.
Items of daily use like food, cereals and items like soap will fall in the nil or 5% category, explained the official. States, however, have made specific demands. Kerala, a large consumer of gold, is keen to tax jewellery at 5%, while Jammu & Kashmir wants handicraft, a key produce of the state, to be placed at nil rate. “There is no issue that is not resolvable,” the official said, ruling out any hurdles in aligning commodities and services against the tax slabs on account of state-specific demands.
The rules approved on Thursday include five rules on accounts, advance ruling, appeals and revision, assessment and audit and e-way bills, as well as four others which were provisionally approved earlier, which relate to input tax credit, valuation, transitional provisions, and the composition scheme.
Reportedly, sub-categories of commodities in the Harmonised System of Nomenclature (HSN) has not been discussed yet. HSN is a system of identifying commodities up to the finest sub-category used in global trade.