New Delhi: India on Thursday approved four main tax slabs ranging from 5% to 28% under a proposed Goods and Services Tax (GST).
“Four-tier GST rate structure of 5%, 12%, 18%, 28% has been decided by the GST Council,” Finance minister Arun Jaitley said.
Announcing the GST rates, finance minister Arun Jaitley said the 5% duty was on items of mass consumption or aam aadmi products. “There will be standard rate of 12% and 18% on other items.”
“Tobacco will fetch 28% tax, excluding cess. Aerated drinks will also fetch tax at the same rate. Most white goods to be taxed at 28% but with riders,” the finance minister said.
The prices of certain consumer durables like televisions, air conditioners, fridges and washing machines may however become cheaper with decrease in taxes.
The long-delayed tax, which would transform Asia’s third largest economy into a single market, is expected to boost revenues through better compliance while making life simpler for business that now pay a host of federal and state levies.
Arun Jaitley will seek parliamentary approval for bills later this month that would set the rate and scope of the GST. State assemblies must also to approve similar bills for the tax to enter force as planned next April 1.