Today’s GST Council meeting finalised the 4-tier Tax Structure in the GST regime, in which four different tax rates are fixed for goods. The new tax rates of 5, 12, 18 and 28 per cent are finalized today. Reportedly, the lower rates will be applicable to essential goods and the luxury and de-merit goods would attract additional cess along with higher tax rates.
Initially, the essential gods including the food items would be charged with zero rate. On the other hand, higher charges with additional cess will be levied on Luxury cars, tobacco and aerated drinks.
Finance Minister Arun Jaitley, while announcing the decisions arrived at the first day of the two-day GST Council meeting, said highest tax slab will be applicable to items which are currently taxed at 30-31 per cent (excise duty plus VAT).
The Revenue from the cess and a newly introducing clean energy cess would be used for compensating states for any loss of revenue during the first five years of implementation of GST rates. It will lapse on expiry of five years.
The Centre’s proposal to levy 4% rate on gold is on hold, he said.
