In the recently concluded GST Council meeting, four tier rate structure has been finalised by centre and state. It was also decided that Exports and special economic zones would be zero-rated.
10 key points around this development you must know:
1. 50% of the goods falling under consumer price index to be zero rated
2. GST rate on gold will be later decided by the Council. No decision as yet.
3. Items of mass consumption would come under the 5 per cent GST rate
4. A decision on the services bracket would be taken later, although it would most likely attract the standard rate of 18%
5. A committee of officials would decide which items would go in which tax bracket, but it would be decided keeping in mind the overall tax incidence currently
6. Tourism and Hotel sector likely to be taxed at 5%
7. Computers and Processed Food likely to fall under 12% bracket. Currently, it attracts 9-15% tax.
8. Luxury goods, aerated drinks, tobacco, pan masala under 28% tax slab + Cess
9. Cess to face annual review, to be phased out in 5 years
10. Several manufactured items including most white goods (such as refrigerator, washing machine, etc.) are taxed at an excise rate of 12.5 per cent and VAT of 14.5 per cent. Along with the cascading effect, these items are taxed at a combined 30-31 per cent, he said. These items will now be taxed at 28 per cent