New Delhi: Footwear below Rs 500 will be taxed at 5 per cent under the Goods and Services Tax, while the rest would be in the 18 per cent bracket once the new regime is rolled out from July 1. Gold, on the other hand, will be taxed at 3 per cent and biscuits at 18 per cent.
The GST Council, chaired by Finance Minister Arun Jaitley and comprising his state counterparts, on Saturday decided on tax rates for six goods including footwear, textiles, biscuits and gold.
Sources said the footwear costing below Rs 500 will be taxed at 5 per cent while that above Rs 500 will attract 18 per cent levy. Currently, footwear priced from Rs 500-1,000 attracts 6 per cent excise duty. Besides, states also levy VAT.
Sources said items like readymade garments are likely to be taxed at 12 per cent, while cotton textiles and cotton yarn will be in the 5 per cent category.
Bidis are likely to be taxed at the highest rate of 28 per cent, they said.
The GST Council has already fitted over 1,200 goods and 500 services in the tax bracket of 5, 12, 18 and 28 per cent last month. The GST Council cleared the pending rules, including transition provisions and returns, with all the states agreeing to July 1 roll out of the Goods and Services Tax.
The GST Council had last month fitted over 1,200 goods and 500 services in the tax brackets of 5, 12, 18 and 28 per cent.
Finance Minister Arun Jaitley chaired the 15th meeting of the GST Council which is scheduled to decide on tax rate of 6 items including gold, textiles and footwear.
Isaac’s statement of all states agreeing to the July 1 rollout assumes significance as West Bengal Chief Minister Mamata Banerjee had said that her state will not roll out the new indirect tax regime in its present form. Bengal Finance Minister Amit Mitra is however attending Saturday’s meeting.
Banerjee had said that her government would not support the new GST system in its present form and that her government would write to Jaitley for making changes to make it suitable for all the sections of the society. “Unless the rates are reduced, they will adversely impact the state’s economy and employment,” she had said.
The draft transition law provided that once GST is implemented a company can claim credit of up to 40 per cent of their Central GST dues for excise duty paid on stock held by businesses prior to the rollout.
Several dealers are choosing to wait and watch rather than buy and hold on to inventories. They have lobbied with the government seeking an increase in the credit limit.