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New Delhi, Friday, May 19, 2017 | 15:08 IST
GST LIVE updates: Tax rates different for AC, non-AC restaurants; healthcare, education exempted
Finance Minister Arun Jaitley says to exempt healthcare and education from Goods and Services Tax
The GST rates on telecom, financial services have been fixed at 18%, while healthcare and education have been exempted from service tax on the second day of the GST Council meet in Srinagar. Decision is yet to be made on gold, silver and other goods.
The two-day GST Council meet is drawing a lot of interest, much like the annual budget, as the prices of many goods and services get determined. The GST Council on Thursday made good progress and categorised 80 to 90 per cent goods and services under the four tax slabs stipulated under the GST Act.
The fitment of rates has brought good news for the middle class as essential commodities have been placed in the lowest tax bracket, while foodgrains have been completely exempted. This means the prices of commodities such as rice, dal, sugar, will go down from July 1 when the GST comes into effect. However, those who were planning to buy a new car could be forced pay more after July 1 as most vehicles fall in the higher tax basket.
Here's how the GST will affect the current prices of different commodities:
Daily-use items like sugar, tea, coffee (barring instant coffee) and edible oil will attract the lowest tax rate of 5 per cent, almost the same as under the current tax structure.
Cereals will be in exempt list. But what is to be done with packaged and branded food that has to be separately decided today.
Prices of food grains, especially wheat and rice, will come down as they will be exempt from the GST. Currently, some states levy VAT on them.
Food grains and common-use products like hair oil, soaps and toothpaste as also electricity will cost less from July 1. These items at present attract 22-24 per cent tax through a combination of central and state government levies.
The GST Council put aerated drinks in the 28 per cent bracket.
Electricity and electrical appliances
ACs and refrigerators will fall in the 28 per cent tax slab while life-saving drugs have been kept at 5 per cent rate.
All capital goods and all industrial intermediaries would attract 18 per cent tax instead of 28 per cent.
The GST Council agreed to impose cess on luxury goods over and above the peak tax rate of 28 per cent.
Motorcycles with engine of more than 350 cc will attract 3 per cent cess and an equal amount of levy will be applying to aircrafts for personal use and yachts.
For cigars, a hefty levy of 21 per cent or Rs 4,170 per 1000 sticks, whichever is higher, would be levied.
Branded gutkha will be slapped with a cess of 72 per cent, while smoking mixtures for pipes and cigarettes will attract a levy 290 per cent.
Tax rates for bidis will be decided today, along with gold, footwear and branded items.
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