GST Soup - Sweet 'n Sour

While the government has announced the rates, they are yet to be notified, say experts

- S Vijaykrishnan

The wait is finally over and the cat is out of the bag. In its meeting in Srinagar over May 18-19, the GST Council finally announced the complete list of tax rates for about 98 categories of (1,211) goods and about 35 categories of goods. Note that rates have been ‘announced’ and not ‘notified’, say experts. “There is still a window period for bodies/ industries to make representations for alterations in rates, said Saurabh Gupta, CA, Gupta Saurabh & Co. While a majority of goods have been placed under the 18% category, though rates for certain items such as gold, beedi remain undecided. For services too, the government adopted a 4-slab rate structure of 5%, 12%, 18% and 28% across almost 35 categories.

However, no consensus could be reached on the rate to apply on six categories of goods including gold as well as beedi. The Council will meet again on June 3 in New Delhi for a decision in this regard. At the meet, some the current rates could also be relooked at.

The announcement of rates brings India a step closer to the final implementation of the Goods and Services Tax (GST) by July 1. What is heartening for the aam aadmi is that 81% of items will be taxed at 18% or below, while only 19% of items will be taxed at 28% and above. Similarly, in case of services, while 35 categories have been taxed under either of the above slabs, all other services ‘not specified elsewhere’ have been taxed at 18% with full input tax credit.

“On many commodities there would be reduction (in prices) because of the cascading effect, but we are banking on the hope that because of a better tax system and less evasion there would be tax buoyancy,” finance minister Arun Jaitley said.

Changes in the section Rate Card