GST Council Sets New GST Rates On 1205 Products – Check Now
Finally, GST council has decided the GST rate on 1205 items in the council meeting held on Thursday night at 11 PM. The government said that most of the goods will be either cheap or the price will remain the same. Milk, curd, and grain are out from tax criteria. Instead of 11.69 on coal, now 5% tax will be charged. It is believed that the electricity will be cheap. Prices of SUV, sedan and luxury cars will be reduced.Daily needs like soap-toothpaste will also be affordable. Council has decided that 81 percent of the items will be less than 18 percent GST. According to Arun Jaitley, tax rates on products and services will also be decided on Friday, if the decision can not be taken, then another meeting will be held.
What is GST
It means Goods and Services Tax. It will be replaced more than 17 indirect taxes of the Central and the States.It will be applicable to the manufacturing, sale, and use of any goods or services in all over the country. Excise Duty, Central Sales Tax (CST), State Sales Tax, VAT, Entry Tax, Lottery Tax, Stamp Duty, Telecom License Fee, Turnover Tax, Electricity Use or Sales and tax on Transport of goods is not applicable after GST.
Council Has Set Rate Such As-
- No Tax On These Three Things
Grains, milk, and yogurt including wheat and rice are excluded from the purview of GST. Some states have VAT on cereals.
- Electricity will be cheap
11.69% tax is currently charged on coal but when the GST implements only 5% tax will be charged. This will reduce electricity tariff in many states
- These Everyday Things will be Affordable
Things like soap, toothpaste and hair oil will fall within 18% tax slab. Earlier, 22-24% tax was charged on these things.
- Small cars can be expensive, CESS will be applicable on luxury car
According to the current tax rate, the excise tax of 12.5 per cent on small cars and 14.5 per cent of the VAT are applicable. Due to which the total tax applied is 27%.
If it is implemented, then a tax of 28 percent with 1-3 percent of CESS is applicable on small cars. As a result, the total tax on small cars will be from 29% to 31%.In such cases, the cost of cars will increase, then car companies will increase the prices.
Currently, from 41.5% to 44.5% tax on cars with engines of more than 1500 cc.
If GST is applicable, these cars will be taxed at around 43 per cent. Considering the decreasing tax, car companies can reduce prices.
Cars are placed on a slab of 28%. Currently, 30-32% tax is charged on cars. After coming to GST, 28% tax on small cars and 1% cess. Thus the total tax will be 29%.
28% tax on medium segment cars with 3% CESS and luxury cars will be 15% CESS.
- No effect on this item.
Daily items used such as tea, coffee (not instant), sugar are placed in the slab of 5% tax. No any changing in tax on this items.
- In the rest of item, tax will look like this
On July 1, the tax on dessert will also be 5%.
AC and fridge are placed on a slab of 28%.
Life-Saving Drugs has been slotted in the lowest 5% slab.
What did Arun Jaitley say?
– We have fixed the tax rate for most items. In the Thursday meeting, the things to be excluded from the tax were also finalized.
– All India Tax Advocates Forum President MK Gandhi said that the according to the new tax structure, the price may be reduced in the country.
According to Rajiv Dimri, Indirect Tax Expert in BMR and Associates, many things are positive in the announcement of GST rates. Most of the items are placed in slabs of 12 to 18 percent.
The council has fixed the rates. This council included finance ministers from all states. He considered the final slabs and rates from the Finance Secretaries Committee of the states. Since the state’s minister are included in the council, hence no objection will be available at the State level.
After passing the GST bill from Parliament, now all the states are passing State GST bill in their assemblies. – After this exercise, the GST will be implemented across the country from July 1.
India will be included in select countries
- With the implementation of GST, India will become a market with ‘One Nation, One Tax’.
- With GST, India will be among the select countries where GST is applicable.
- France was the first country, where implemented GST in 1954.
- After France, more than a dozen countries like Germany, Italy, Britain, South Korea,
- Japan, Canada and Australia have implemented GST.
- China introduced GST in 1994 and Russia in 1991.
- Saudi Arabia’s plan is to implement GST from 2018.