The Goods and Services Tax has taken the entire nation by storm. It’s been the government’s most ambitious attempt at reforming the indirect tax policies into one universal taxation.
This national tax is projected to create a common market for 1.3 billion people.
The 14th GST Council meeting was held yesterday at Srinagar, Jammu & Kashmir, chaired by the Union finance minister Arun Jaitley along with several members that included the representatives of the 32 states and Union territories.
“The overall impact is not inflationary. The tax burden hasn’t increased in any commodity. In many, there is a reduction, particularly as tax on tax is gone. On some, we have deliberately brought tax down.” – Finance Minister Arun Jaitley while speaking to the reporters after the meeting on Thursday.
The GST Council has broadly approved the GST rates for goods at nil rate, 5%, 12%, 18% and 28% to be levied on certain goods. A lot of these goods has been kept under the 18% tax slab by the government. The GST council is yet to take a call on the GST rates for goods like precious metals, textile, biris, footwear etc.
These rates will be further subjected to a vetting process during which the list may undergo some changes. Here is the various tax slab under which the 1211 items has been categorized.
GST Rates in India 2017
Items under No Tax
No tax will be imposed on items like fresh meat, fish chicken, eggs, milk, buttermilk, curd, natural honey, fresh fruits and vegetables, flour, besan, bread, prasad, salt, bindi. Sindoor, stamps, judicial papers, printed books, newspapers, bangles, handloom etc.
5% Tax Slab
The items that will attract a tax of 5 % are fish fillet, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, kerosene, coal, medicines, stent, lifeboats
Image credits – Bloomberg
12% Tax Slab
The items under the 12% tax slab are frozen meat products, butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, Bhutia, namkeen, Ayurvedic medicines, tooth powder, agarbatti, coloring books, picture books, umbrella, sewing machine, and cell phones.
18% Tax Slab
The items under the 18% tax slab are flavored refined sugar, pasta, cornflakes, pastries, and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, mineral water, tissues, envelopes, tampons, notebooks, steel products, printed circuits, camera, speakers, and monitors.
28% Tax Slab
The highest tax rates under the GST system will be for these items – Chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with chocolate, pan masala, aerated water, paint, deodorants, shaving creams, after shave, hair shampoo, dye, sunscreen, wallpaper, ceramic tiles, water heater, dishwasher, weighing machine, washing machine, ATM, vending machines, vacuum cleaner, shavers, hair clippers, automobiles, motorcycles, aircraft for personal use, and yachts.
The Last Lap in the Revolution
The positive impact of the GST council meetings suggests that this might be the last lap in the revolution of India’s biggest tax reform since Independence. A lot has been gone to make this movement historical and impactful. It’s been a continuous effort of 10 years to unify the country of 1.3 billion into a common market by streamlining its archaic tax system.
The council’s decisions yesterday suggest that a July 1 rollout is almost a certainty now.
More Compliances, Less Corruption
After GST is implemented our country would be a part of about 160 countries that have a GST, including Japan, Canada, and Poland. Under the GST system, the new levy will be applied at the final point of consumption, that will reduce the tax on tax cascading effect, allowing the genuine producers to easily claim their credits and this will further minimize the chances of corruption.
Image credits – Bloomberg
As of May 4th, 2017, eight states including Madhya Pradesh, Haryana, Jharkhand, Bihar, Rajasthan, and Telangana have passed state goods & services tax act in their respective state assemblies. As per a federal government statement, the remaining states are expected to pass the GST state bill before the end of this month, except for one or two.
The footnote below gives a complete list of the GST Rates in India and the goods that are categorized under those rates. For more details on the Goods and Services Tax, talk to our experts at IntegraBooks.