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 alongwith compensation.
GST Rate Slabs – The proposed GST rates are as below :
i.6% – Food items and other necessities.
ii. 12% – Substantial Goods & Services
iii.18% – Rest Of Goods & Services
iv.26% – Luxury goods
v. 4%- Precious metals like gold .
Aditionally, 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 per cent 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% .
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