The GST council finalised tax rates that will apply to different goods and services under a new sales tax which New Delhi aims to roll out from July 1.
A panel comprising central and state finance ministers fixed the rates for over 1,200 items under the Goods and Services tax, amid demand by some states to keep essential items under the lower tax category.
Under the new tax, rates will range from 5 to 28%, with 12% and 18% being the standard rates. Most raw food items including milk will be exempted from tax while the panel still has to finalise rates for processed food items.
Here are a few expert reactions:
Pratik Jain, Partner and Leader – Indirect Tax, PwC: “It seems that GST council has cleared all Rules which have also been put up in public domain now. One will have to see to what extent the concerns of the industry have been addressed as several representations were made on the draft rules, specifically on those relating to transition and E permits for transportation of goods.
On rates, categorisation of several consumer products like soaps, tooth paste and hair oil under 18% is good news and should see price drop for consumers. Similarly, several food items such as edible oil, tea, coffee sugar etc have been kept at 5%, with exemption for milk and food grains, which would also bring cheers for industry.
The only concern is that 19% items (over 200) would be kept under 28%, which was initially meant for only few commodities such as luxury cars, aerated beverages etc. One would hope that Government would continue to make efforts to bring the rates down on most of these products as we go along. Further, it seems that for branded and packaged food items, rate has not yet been decided. From a policy standpoint, it would be better to have an uniform rate on a particular product, irrespective of it being branded or unbranded.”
Suresh Nair, Tax Partner, EY India: “The GST Council has done a commendable job to have the rate fitment for 81% of the commodities within and upto the 18% GST rate slab. This would definitely boost positive sentiments around GST. Outcome of tomorrow's session will be critical for nailing down on the GST Go Live date". Bipin Sapra, Tax Partner, EY India: “The broad rate structure of GST has become clear with very few items being exempted, most of them being in the 18% category and a large chunk under the 28% category. Accordingly, while food stuff and unprocessed basic items like tea, coffee and edible oil may become cheaper, a large number of items which will be under 28% bracket would become costlier."