Lunes, 24 Julio, 2017

GST regime: Know what gets cheaper and costlier from July 1

GST Council meet begins in Srinagar rate fitment to be decided GST rates announced: Milk, cereals to be exempted, foodgrains to turn cheaper
Cris De Lacerda | 20 May, 2017, 11:23

Addressing a press conference after the two-day 14th GST council meeting in Srinagar today, Mr. Jaitley said, services to be taxed at 5, 12, 18, 28 per cent.

Unlike the multiple incidences of taxation levied now, the new tax structure will see a uniform rate of 28 per cent on cars, said a person with knowledge of the decisions made at the GST Council meeting on Thursday.

Services will be taxed under the multi-tier structure as goods; the council has fixed slabs at 5, 12, 18 and 28 per cent.

Addressing a press conference, Finance Minister Arun Jaitley said, "GST is an efficient system of taxation and this inherent efficiency will help curbing tax evasion".

Maruti Suzuki chairman RC Bhargava said more clarity on impact of GST on vehicle prices would emerge only once the final rates are announced for different categories of vehicles.

As far as goods are concerned, 81% of them will be taxed at 18% or less, and goods of mass consumption will attract lower rates of GST.

GST rates have also been finalized for various types of hotels and restaurants. Producer states in fact at one time suggested a lower tax rate for bidis at 18 per cent.

Hotels and lodges with tariffs less Rs 1000 will be taxed at 5%.

Motorcycles of more than 350 cc engine capacity will attract a total of 31 per cent tax under the GST regime, same as the tax incidence on private aircraft and luxury yachts.

"The initial reaction is of great despair.28 per cent would be the end of the industry", Federation of Hotels and Restaurants Associations of India (FHRAI) Vice President Garish Oberoi said in a statement.

The items which have been put in the 28% slab include aerated drinks, perfumes, after-shave lotions, cars, two-wheelers, air conditioners, make up products, cement, refrigerators etc.

Foodgrain, milk, cereal, toiletries and a bulk of consumer items will become cheaper once the GST regime kicks in on July 1.

"It is imperative to manage the transition process through capacity building of tax officials and the members of trade and industry", Patnaik said. Solar cells and modules will be levied at 18% with coal seeing an additional 5% charge.

The rates are in line with those finalised for goods.

Net effect of GST will not be inflationary, he said, adding that healthcare and education services will continue to be exempted from tax under GST. Touted to be India's biggest tax reform since independence, GST will subsume all other indirect taxes on supply of Goods and services, right from manufacturer to consumer. These will now attract 18% GST, nearly a 10% slash from the current rate of taxation.

Items like edible oil, sugar, tea, coffee will have a five per cent tax levied on them.