GST Council clears rates, rules, states agree to July 1 rollout
Footwear below ₹500 will be taxed at 5₹ under the GST, while the rest would be in the 18% bracket once the new regime is rolled out from July 1.
Gold, on the other hand, will be taxed at 3% and biscuits at 18%.
The GST Council, chaired by Finance Minister Arun Jaitley and comprising his state counterparts, decided on tax rates for six goods including footwear, textiles, biscuits and gold.
Addressing the media after the meeting, the finance minister disclosed the various rates, adding that the Council would meet again on June 11.
Footwear costing below ₹500 will be taxed at 5₹ while that above ₹500 will attract 18% levy. Currently, footwear priced from ₹500-1,000 attracts 6% excise duty. Besides, states also levy VAT.
Items like readymade garments will be taxed at 12%, while cotton textiles and cotton yarn will be in the 5% category.
Bidis will be taxed at 28% under GST and will not attract any cess; tendu leaves will be taxed at 18%, the finance minister said.
The Modi government has been cracking down on tobacco consumption ever since it came to power at the centre.
The GST Council has already fitted over 1,200 goods and 500 services in the tax bracket of 5, 12, 18 and 28% last month.
The Council at its 15th meeting today took up for discussion the remaining goods for taxation.
It approved the transition and return rules earlier in the day.
GST, to be rolled out from July 1, will unify 16 different taxes and make India a single market.
The GST Council also cleared the pending rules, including transition provisions and returns, with all the states agreeing to July 1 roll out of the Goods and Services Tax.
“We were discussing the rules and (they) have been completed. Transition rules have been cleared and everybody has agreed for July 1 roll out,” Kerala finance minister Thomas Isaac told reporters here.
West Bengal Chief Minister Mamata Banerjee had said on Friday that her state will not roll out the new indirect tax regime in its present form.
Bengal finance minister Amit Mitra however did attend Saturday’s meeting.
Banerjee had said Friday that her government would not support the new GST system in its present form and that her government would write to Jaitley for making changes to make it suitable for all sections of the society.
“We will not support the GST in its present form. In its present form, it doesn’t suit every section, especially the unorganised sector. They (Centre) have to rectify it… We have to continue with our fight to bring down the tax rates on certain products.
“Unless the rates are reduced, they will adversely impact the state’s economy and employment,” she had said.
As for the transition rules approved by Council, the industry had been demanding some relaxation of the provision of deemed credit.
The draft transition law provided that once GST is implemented a company can claim credit of up to 40% of their Central GST dues for excise duty paid on stock held by businesses prior to the rollout. Several dealers are choosing to wait and watch rather than buy and hold on to inventories. They have lobbied with the government seeking an increase in the credit limit.
