The GST Rate structure finalized just now. Finance Minister Arjun Jaitley has announced new Goods and Service Tax (GST) Rates will range from 5 to 28 per cent. The top rate of GST is likely to be 28 percent.
The new GST rates have been announced at the GST council meeting today. Finance Minister Arjun Jaitley told that highest tax piece would apply to items which are at present taxed at 30-31 per cent. The GST Council which consists of Mr. Arun and his colleagues from the various states has agreed on the rate and scope of the long-delayed tax.
The four blocks have been set at 5, 12, 18 and 28 percent and the tax rate must be approved by parliament. Food grains are likely to be excused from the GST rate, and tobacco products may be taxed at 40 percent. In four slabs, the lowest rate of 5 per cent would be for everyday use items while GST rates of 12 and 18 percent Government targeted to be executed from April 1, 2017.
After the first day of the two-day GST Council meeting, Central Finance Minister Arun Jaitley said that “highest tax slab will apply to items which are currently taxed at 30-31% (excise duty plus VAT).”
Jaitley added that about Rs 50,000 crore would be needed to compensate states for loss of revenue from the rollout of GST, which is to subsume a host of central and state taxes like excise duty, service tax, and VAT, in the first year.
The Finance Minister will seek parliamentary approval for the bills later this month that would set the rate and scope of the GST. The state assemblies play an important role in making these proposals into force only with the approval of states the bill will be turned to act.