New Delhi: The Centre on Thursday approved four main tax slabs ranging from 5% to 28% under a proposed Goods and Services Tax (GST). The panel headed by the Finance Minister Arun Jaitley approved GST rates at 5%, 12%, 18% and 28%.
The Finance Minister also said that the GST preparation is going on as per the schedule.
“Four-tier GST rate structure of 5%, 12%, 18%, and 28% has been decided by the GST Council,” Finance Minister said.
“Considering the inflation impact of having one standard rate, there’ll be two standard rates of 12% and 18%,” Arun Jaitley said while announcing the rates.
The two big items that were discussed at the GST council meet today were-rate structure and compensation formula; and cross empowerment.
The rate structures are as follows:
1) Zero tax rates on food grain used by common people.
2) 5% on items of mass consumption used by common people.
3) 5% GST rate on items of mass consumption. Additional revenue from 28% slab will be used for 5% slab.
4) Aerated drinks, Pan masala, luxury cars, tobacco products to be taxed higher than 28%.
5) White goods and others that were taxed at 30-31% will now be taxed at 28% but with a rider.