GST 4 Tier Rate Structure Announced by Arun Jaitley
GST Council has approved the 4 Tier Rate Structure today at the Council meeting. The same was announced by Finance Minister Arun Jaitley
GST Council has approved the 4 Tier Rate Structure today at the Council meeting. The same was announced by Finance Minister Arun Jaitley.
Four Tier Rate Structure of 5%, 12%, 18% and 28% has been decided after a two day long deliberation meeting of the GST Council. The FM also announced that revenue loss to states will be compensated with additional cess levy as well as clean energy cess levy on aerated drinks, luxury cars and tobacco, which will be in the 28% bucket. The FM further assured timely implementation of the GST as per plan and said that 12% and 18% will be standard rates, considering the inflation impact.
He further added that 50% of items in the CPI basket will be under the Zero Tax bucket, as these affect inflation. Items of mass consumption will be included in the 5% bucket. Tax rates on Gold will be decided at a later date, clarified Jaitley.
Items taxed at 30-31% (VAT+Excise) will be in the 28% basket, which will include Luxury cars, pan masala, tobacco and aerated drinks. The compensation package due to additional levy on additional products is required to mitigate the losses to “producer states” and this package will be given over a period of 5 years, wherein Rs 50,000 Crores will be needed in the first year itself to compensate the loss of revenue to states.
The GST Council meeting was sped up to sort out issues concerning the rates so as to enable the Parliament to approve the CGST and IGST legislations in the upcoming winter session of the Parliament which is scheduled to begin on 16th November.
Source: Media Reports