14th GST Council meet begins in Srinagar

Joy Montgomery
May 19, 2017

The formal GST Council meeting will be held at the same venue while the decisions taken at the meeting will be spelled out by Jaitley at a press conference on Friday. "If the 28 per cent tax rate and an additional cess of 15 per cent is levied. then vehicle prices technically would come down".

He said sugar, tea, non-instant coffee, edible oil and coal will fall under 5% rate of tax, toothpaste, hair oil and soaps will be taxed at 18%.

A few others are keen on only two rates for service tax - 12 per cent and 18 per cent.

Foodgrains, cereals, milk, jaggery have been completely exempt from GST.

All capital goods and all industrial intermediaries would attract 18 per cent tax instead of 28 per cent.

"No increase on any commodity". Union finance minister Arun Jaitley and his ministry officials as well as representatives of 29 states and Union Territories will be present at the meeting. Of the 1211 items, 7 per cent will be exempted, 14 per cent will be in the 5 per cent slab, 17 per cent in the 12 per cent bracket, 43 per cent in the 18 per cent segment, while 19 per cent will go into the top bracket of 28 per cent, the Revenue Secretary said.

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The goods and services tax (GST) is slated for launch from July 1.

For SUVs and cars fitted with 1500cc and larger engines, the current incidence of taxation is 41.5 per cent to 44.5 per cent - 27-30 per cent of central excise and the rest state Value-Added Tax. The producer council also asked that administration of Entertainment Tax remain with the state government as it is a source of revenue for local bodies. "We are now in final stages of fixing tariffs for different commodities".

Jaitley said that while the overall basket of taxes will see a reduction, he hoped for greater tax buoyancy because of greater efficiency and less tax evasion.

"However, it seems a lot of work is yet to be done".

While small petrol cars with engine less than 1200 cc will attract 1 per cent cess, that with a diesel engine of less than 1500 cc will attract 3 per cent cess, according to the list of items for cess posted on CBEC website late night.

In her comments, Saloni Roy of Deloitte Haskins & Sells LLP said there is an expectation for a clear indication on whether the date of GST implementation continues as July 1, which is barely 42 days away.

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