New Delhi [India], Nov 3 : The most anticipated Goods and Services Tax (GST) Council has finally zeroed on a four-rate tax structure of 5, 12, 18 and 28 percent, said Finance Minister Arun Jaitley at a press conference here on Thursday.
Jaitley said the government has kept about 50 percent of products in the consumer basket, such as foodgrains, as 'zero-rated'.
Also, he added that the cost empowerment issue will be taken up tomorrow. The GST Council may finalize the entry-level of the Goods and Services Tax rate at five percent while the upper level will be fixed at 28 percent.
The standard rates for most items will be fixed at 12 and 18 percent as was earlier planned, say government officials.
The Centre had recommended tax rates of 5, 12, 18, 25 and 40 percent, but pressure from the industry to keep a higher upper limit at 28 percent and removing the cess over 26 percent has led to the change.
Also, states had asked the GST Council to revise the six percent lower level tax to five percent. The council may also fix the GST tax rate for tobacco at 40 percent plus an additional duty. Announcing the GST rates, Jaitley said the five percent duty was on items of mass consumption or 'Aam Aadmi' products.
"Tobacco will fetch 28 percent sin tax, excluding cess. Aerated drinks will also fetch tax at the same rate. Most white goods to be taxed at 28 percent but with riders," announced Jaitley at the press conference.
The prices of certain consumer durables like televisions, air conditioners, fridges and washing machines may however become cheaper with decrease in taxes.