GST Council – Meeting on 3^rd November,2016

GST Rate Slabs finalised

Briefing the press after the meeting of the GST Council Shri. Arun Jaitley stated that the GST rate slab has been finalized by consensus.

The slab rates are 5%( essentials), Standard Rate of 12% and 18% and 28% for demerit goods. Cess would be levied on certain demerit goods over and above the rate of 28%. Cess is likely on five products including Luxury Cars, Tobacco, Aerated Drinks. The rate of cess was not specified.

Sri. Jaitely also stated that there would be a 0% tax on goods consumed predominately by the common man covering almost 50% of the goods comprised in the Consumer Price Index. He said that the goods in this category would be “Zero Rated”. As is understood, “Zero Rated” goods mean that there would be no tax on the supply of those goods but Input Tax Credit (ITC) would be eligible which can be used by the assessee either to discharge tax on other taxable goods or claimed as refund. Further clarity is required on whether the goods in the 0% tax rate are “Zero rated” goods or just “exempted goods” which means that the supply is exempt and no Input Tax Credit is eligible.

On services, the indication is that the taxable services would be split between 12% and 18%. pan>

Decision on rate of tax by consensus augurs well for rollout of GST as scheduled.

Date : November 3, 2016
Image courtesy: ibtimes.co.in