4-tier GST structure finalized
The center and the state governments agreed on the rates for the Goods and Services Tax (GST), which is set to get implemented from April 1st, 2017. This GST which will subsume several taxes, including excise duty and VAT--will have four rates.
- To lower the inflation & for the sake of poor, food grains will be exempted from taxation.
- The lowest tax levied would be 5%, which will be for all items of mass consumption.
- Two standard rates of 12% and 18% will be on goods such as soap, toothpaste, oil, shaving stick, etc.
- 28% tax will be levied on luxury items like high-end cars, aerated drinks, tobacco and pan masala.
- According to the Finance Minister Arun Jaitley, Rs 50,000 will be required to compensate the losses incurred by states from the implementation of GST Bill. GST Council is yet to finalize the goods which fall in each tax bracket.
