On 4th
November,2016 the much awaited 4 tier GST rate slab announced by GST Council. The
GST Council has categorized the rates as
below:
FOUR TIER GST RATES
ü
Lowest Slab for essentials @5% – Food items and other mass
essentials which is 1% lesser than the proposed.
ü
Standard or Substantial Slab rate @ 12% – For Substantial Goods
& Services.
ü
Middle Slab @ 18% – Rest Of Goods & Services which are not
covered in essentials and substantial goods
ü
Highest for luxury and demerit goods slab @28% – Luxury &
Demerit goods.
Other Important points :
Ø
Cess will be levied on products like Luxury Cars, Tobacco Products,
Aerated Drinks etc.
Ø
50% of
the goods comprised in the Consumer Price Index would be “Zero Rated”. “Zero
Rated” goods mean that there would be no tax on the supply of those goods but
Input Tax Credit (ITC) would be eligible for setoff by the assessee either to discharge tax on
other taxable goods or claimed as refund. However such goods in “Zero rated” goods would be exempt having no
set off of credit or that the supply is
exempt and Input Tax Credit is eligible for setoff is not specifically made
clear for further classification or not.
Ø
The taxable services would be split between 12% and 18% that will
make most of the services costlier than present.
