The Goods and service council on Thursday decided the GST rates for 1,211 items, a majority kept at 18%, though the rates on gold and beedi remained undecided. The Centre also chose to lower the incidence of tax on mass-use items to ensure that prices come down in the new regime.
As a result of this, food grains and gur (jaggery) have been completely excused from the levy, while products such as mithai, edible oil, sugar, tea, coffee and coal will attract 5% GST. Similarly, hair oil, toothpaste and soaps are in the 18% bracket along with capital goods and industrial intermediaries.
As per sources, luxury cars will have 15% cess on the tax while small cars to have 28% GST, along with a small cess. Consumer durables such as AC and fridge too are in the 28% bracket, although officers said given the current incidence of 30-31%, there should be a reduction in prices.
Notably, food grains, cereals and milk will cost less from July 1 when the Goods and Services Tax (GST) is rolled out.
“We have finalised tax rates for the majority of items as well as the exempt list (at today’s meeting),” Arun Jaitley said after the first day of the meeting.
“Rates have been finalised for the rest,” he added. He further added that tomorrow’s meeting will also decide on the rate of tax for services. As many as 81% of the items will attract 18% or less GST.
Jaitley also said that there will be no inflationary impact as most of the rates which are at 31% have been brought down to 28%.