New Delhi, May 19: Union Finance Minister Arun Jaitley on the second day of the Goods and Services Tax Council meeting on Friday said that there is hardly anything where rates have been hiked. “There is hardly anything where rates have been hiked either present rates were maintained or they’ve been brought down”, Jaitley said. The GST Council, the apex decision-making body for the new tax on Thursday decided four different rate slab for services which are 5%, 12%, the standard rate of 18% & luxury rate of 28%. 5% mostly comprises of transport services. The fitments of the slabs have been done in a way that there is no increase in tax incidence. The services related to gambling, race club betting and cinema halls will also be taxed at 28 percent.
The GST Council is headed by Union Finance Minister Arun Jaitley and comprises of representatives of all states. In the opening session of the two-day meeting, the Council approved rules for the Goods and Services Tax (GST) regime that is scheduled to kick in from July 1. While briefing media after GST Council meet in Srinagar, Jaitley said cereals, milk, to be part of the exempt list under GST while food grains to be cheaper for consumer post-GST rollout.
Jaitley said service on Non-AC restaurants will be 12% while restaurants in 5-star hotels will have the same rate as the hotel. He further said 18% service tax will be levied at air-conditioned restaurants with liquor license while restaurants with a turnover of Rs 50 lakh or below to face 5% tax under GST and non-AC restaurant at 12% while luxury hotels will have to bear taxes up to 28 per cent. It was announced that that hotels and lodges char ustomers below Rs 1,000 per day would be exempt from GST while those charging between Rs 2,500-5,000 will be taxed at 18 percent.
The tax on gold and precious metals will be taken up on 3 June meet. Jaitley said most services are split up into 12% and 18% bracket. The Finance Minister said that entertainment tax will be merged with service tax under GST. He further informed that services will be taxed at 5, 12, 18, 28% while transport services to be taxed at 5%. Healthcare and education has been exempted from the Goods and Services Tax . Jaitley said besides being a more efficient tax is also going to be consumer friendly. The Goods and Services Tax (GST) council on Thursday fixed tax rates on 1211 items, most of which will likely become cheaper as the new rates will be lower than the current effective levies.
The Reserve Bank of India during the last week termed GST a “game changer”. It said given the cross-country experience and empirical evidence on efficiency gains from the Value Added Tax (VAT) in the Indian context, the implementation of this comprehensive indirect tax is likely to ensure higher tax buoyancy and an improvement in government finances over the medium term, PTI reported. The Finance Minister was of the view that there should be minimum exemptions under the GST and should be provided for only if it is essential.
Mobile phone buyers will face a tough time as most mobile phones may get costlier with the government imposing GST of 12%. The prices of phones made locally in India may go up while those that are imported into India are likely to go down. As per reports, mobile phones imported and sold in India, a duty was imposed from 17% going upto 27%, which now comes down to 12%. With India’s landmark tax reform is all set for its rollout on July 1, the rates announced are along the expected lines, where a majority kept at 18 percent. It was reported by the Revenue Secretary that out of the 1211 items, 7 per cent will be exempted, 14 percent will be in the 5 per cent slab, 17 per cent in the 12 percent bracket, 43 percent in the 18 percent segment, while 19 percent will go into the top bracket of 28 per cent