12 Key Takeaways From The GST Council Meeting | SupportBiz
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12 Key Takeaways From The GST Council Meeting

Tags: GST
The GST Council on May 18 finalised tax rates on 80-90 per cent of goods and services under the four-slab structure with essential items of daily use being kept in the lowest bracket of 5 per cent. The Council, headed by Union Finance Minister Arun Jaitley and comprising representatives of all states, in the opening session of the two-day meeting also approved rules for the Goods and Services Tax (GST) regime that is scheduled to kick in from July 1. Jaitley was of the view that there should be minimum exemptions under the GST and should be provided for only if it is essential, a government official said.

Before the start of the meeting, Kerala Finance Minister Thomas Isaac made a case for 5 per cent tax on gold under the GST regime instead of 1 per cent being demanded by some quarters as he felt that the precious metal is not an essential commodity. Yogi Adityanath-led Uttar Pradesh sought zero levy on ‘puja samagri’ instead of the proposed 18 per cent. A few others are keen on only two rates for service tax — 12 per cent and 18 per cent. The GST will be a national sales tax that will be levied on consumption of goods or use of services.

It will replace 16 current levies — seven central taxes like excise duty and service tax and nine state taxes like VAT and entertainment tax — thereby creating India as one market with one tax rate.

With the GST, India will join select league of nations with a goods and service tax. France was the first country to implement the GST in 1954. Since then, Germany, Italy, the UK, South Korea, Japan, Canada and Australia have been among the over a dozen nations which have implemented the GST. China implemented GST in 1994 while Russia did it in 1991. Saudi Arabia plans to do it in 2018.

Here are the 12 highlights every trader should know about GST Council Meetings

1) Focused mainly on fitment of goods under slabs, discussed and approved:

2) 7 GST rules while legal committee is looking at remaining 2 (Return & Transition) Rules.

3) Tariffs for about 1211 items was finalised

4) 81% of the items will fall up to 18% rate slabs. Only 19% of the goods above 18%.

5) Common man items have gone into 12% & 18% slab.

6) Indians sweets or mithai will fall under 5% slab.

7) Coal to be taxed at 5% against 11.69% currently.

8) All raw food items, including food grains to be exempt.

9) Processed food of daily needs to be in the 5% slab.

10) Sugar, Tea, Coffee (except Instant) and edible oil to fall under 5% slab, while cereals, milk to be part of exempt list under GST.

11) Tooth paste, hair oil will be taxed at 18% against 28% currently.

12) In a big boost to industry, Council has set the rate for capital good, industrial intermediate items at 18%