Educational and Health services have been taken down from the range of the Goods and Services Tax (GST). The decision was taken by Finance Minister Arun Jaitley in a meeting of GST council. The bracket for gold has also not been finalized yet.
The Finance Minister said food items, including cereals, will become cheaper as they have been kept under the exempt category to which milk is also proposed to be added.
Arun Jaitley also said that while the overall basket of taxes will see a reduction, he hoped for greater tax buoyancy because of greater efficiency and less tax evasion.
“On many commodities there would be reduction because of the cascading effect, but we are banking on the hope that because of a better tax system and less evasion there would be tax buoyancy,” he said.
Items like hair oil, toothpaste and soaps, which are now taxed at 28 per cent, will be taxed at 18 per cent under GST. Sugar, tea, coffee (except instant), edible oil and coal will attract 5 per cent tax. Coal is currently taxed at 11.69 per cent.
Air-conditioners and refrigerators will come under the 28 per cent tax slab, while life saving drugs have been kept at 5 per cent rate. Around 400 items are currently exempt from excise and VAT under the existing indirect tax regime.
With the government announcing that 7 per cent of items will remain under the exempt category, the number of items which enjoy zero per cent tax will come down drastically.
(Latest News in English from Newsx)