Srinagar, May 18 (PTI) Foodgrains and common-use products like hair oil, soaps and toothpaste as also electricity will cost less from July 01 when the GST is scheduled to be rolled out as the all-powerful GST Council today finalised tax rates for bulk of the items.
While the Council fitted all but six items in 5, 12, 18 or 28 percent tax brackets, cars will attract the top rate as also a cess in the range of 1 to 15 percent on top of it.
Smalls cars will be charged 1 percent cess on top of 28 percent tax, mid-sized cars will attract 3 percent cess and luxury cars 15 percent cess on top of the peak rate.
Aerated drinks too have been put in the 28 percent bracket but the rates for bidis along with gold, footwear and branded items would be decided tomorrow.
The Goods and Services Tax (GST) on coal has been brought down to 5 percent from the current tax incidence of 11.69 percent, thereby making electricity generation cheaper.
The GST rates for all but six items were finalised at the first day of the two-day meeting here of the GST Council, headed by Union Finance Minister Arun Jaitley and comprising state representatives.
Common use products like hair oil, soaps and toothpaste will be charged with a single national sales tax or GST of 18 percent instead of present 22-24 percent tax incidence through a combination of central and state government levies.
ACs and refrigerators will fall in the 28 percent tax slab while life-saving drugs have been kept at 5 percent rate.
All capital goods and all industrial intermediaries would attract 18 percent tax instead of 28 percent.
Milk and curd will continue to be exempt from taxation when the GST replaced current indirect taxes. 'Mithai' or sweets will attract 5 percent levy.
Daily-use items like sugar, tea, coffee (barring instant coffee) and edible oil will attract the lowest tax rate of 5 percent, almost the same as current incidence.
Prices of foodgrains, especially wheat and rice, will come down as they will be exempt from the GST. Currently, some states levy Value Added Tax (VAT) on them.
"We have finalised tax rates for a majority of items as well as the exempt list (at today's meeting)," Jaitley told reporters here.
Out of the 1,211 items, the GST rate for all but six was decided on the first day, he said, adding the tax rate for items that would be decided tomorrow include gold, footwear, branded items and bidi.
"Rates have been finalised for the rest," he said.
Also, the GST for packaged food items is to be finalised.
Tomorrow's meeting will also decide on the rate of tax for services, the finance minister said.
"(With) the standard rate items of 12.5 percent and 15 percent, plus the cascading effect of local taxes, the tax rate was going up to 30-31 percent. These 30-31 percent taxes... have all been brought down to 28 percent.
"Of these, some are items to be used by common man soap, oil -- that has been brought down to 18 percent. So there will be a substantial reduction as far as those items are concerned. We have kept one criteria in mind that the overall impact is not inflation, in fact it brings down the costs," Jaitley added.
Revenue Secretary Hasmukh Adhia said 7 percent of the items fall under the exempt list while 14 percent have been put in the lowest tax bracket of 5 percent. Another 17 percent items are in 12 percent tax bracket, 43 percent in 18 percent tax slab and only 19 percent of goods fall in the top tax bracket of 28 percent.
As many as 81 percent of the items will attract 18 percent or less GST.
On gold, states demanded a 4 percent tax even though the rate is not among the 5, 12, 18 and 28 percent approved bands.
Jaitley said there will be no inflationary impact as most of the rates which are at 31 percent have been brought down to 28 percent.
"Cereals will be in exempt list. But what is to be done with packaged and branded food that has to be separately decided. We are yet to make a decision on that," he said.
Jaitley said the key feature of today's rate decision has been that "tax rate under GST will not go up for any of the commodities. There is no increase. On many commodities, there is a reduction particularly because the cascading effect of tax is gone."
"Of several commodities, we have consciously brought down the tax. In the overall basket there would be a reduction, but we are banking on the hope that because of a more efficient system, evasion would be checked and tax buoyancy would go up. That despite reduction the revenue neutrality and tax buoyancy thereafter would be maintained," he added.
Srinagar, May 18: Jammu and Kashmir government will seek to pass the Goods and Services Tax (GST) Bill in the Legislative Assembly within the next 30 days, state Finance Minister Dr Haseeb A. Drabu said today.
"We will seek to pass the GST bill in the next 30 days. It will be very beneficial for state of Jammu and Kashmir and we estimate that our tax revenue will increase by Rs 1,500 crore to Rs 2,000 crore," Drabu told reporters before the two-day GST Council meeting began here.
He said importing states like J-K stand to benefit from the GST as there will be no cascading effect of taxes, resulting in fall in prices of commodities.
He said J-K, which is the only state enjoying special taxation powers, will make necessary changes to pass the GST bill, which is billed as the biggest tax reform in the history of independent India.
Asked about his government's plan to bring real estate under GST, Drabu said, "We are thinking about it."
GST, which will replace a plethora of central and state taxes, is a consumption-based tax levied on sale, manufacture and consumption on goods and services at a national level.
Under it, C-GST will be levied by the Centre, S-GST by states and I-GST on inter-state supply of goods and services.
Different indirect taxes of central excise duty, central sales tax CST and service tax are to be merged with C-GST while S-GST will subsume state sales tax, VAT, luxury tax and entertainment tax.