The new GST or Goods and Services Tax will range from 5 to 28 per cent in a four-bracket structure, agreed upon today by the GST Council
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The four GST slabs have been set at 5%, 12%, 18% and 28% for different items or services.
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The brackets are steeper than the rates of 6, 12, 18 and 26% earlier proposed by the government.
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The peak rate of 28% will apply to luxury goods. GST for tobacco products will be fixed at the level of cess that these products attract now.
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The Finance Minister pointed out that the average is lower than the 18% demanded by the opposition.
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Service Tax will go up from 15% to 18 %.
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The tax rate agreed upon today must be now be approved by parliament, which meets from November 19 for the winter session.
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Parliament has to pass two bills related to GST in the winter session to be on track to roll out of the new indirect tax regime from April 1,2017.
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Fitment or categorization of items for each slab will be done by officials and will then be approved by the GST council, Mr Jaitley said.
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GST does away with indirect levies charged when goods cross state lines and unifies India into a single market.