GST rates: Industry worried over commodities coverage under highest tax slab of 28%

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A significant step forward towards GST implementation, the decision of all-powerful GST Council reaching consensus on a four-tiered GST rate structure, has much to look forward to. The clear intent of the government is to have a progressive indirect tax structure for the economy as the overall rate framework seems to have addressed a common man’s ask. At the same time, the announced rates came with a tone of surprise for the industry and have raised some concerns upon which further clarity should emerge when the commodities and services are precisely allocated to the respective tax slabs.

The four-tiered rate structure ranges from 5% to 28%, with certain products being exempt/zero-rated. The categorisation of products has been proposed in a manner that essential commodities and items of mass consumption by common people would bear a lower tax. Around half of the items forming part of Consumer Price Index have been stated to be kept in the no-tax basket which might even reduce the tax outgo for a common man on daily consumables. The slab of 12% should ideally cover all the categories of goods which currently enjoy concessional/merit rate taxation for excise as well as VAT purposes. Further, it’s widely being hoped that 18% slab would cover most of the products. This is important to ensure that ultimate consumers do not see much of a difference in monthly consumption budget on account of enhanced the tax costs.

Read more at: http://www.financialexpress.com/fe-columnist/gst-rates-industry-worried-over-commodities-coverage-under-highest-tax-slab-of-28/445859/