GST Bill is going to be consumer friendly: Jaitley

The Goods and Services Council today has released new tax rates for 1,211 items in which majority of items being kept lower than 18 per cent rates.

Jaitley said tax on gold and precious metals will be taken up at the next meeting of the Council on June 3.

Motorcycles of more than 350 cc engine capacity will attract a total of 31 per cent tax under the GST regime, same as the tax incidence on private aircraft and luxury yachts. Similarly, restaurants will also charge 18 per cent tax instead of 22 per cent.

Tripura Finance Minister Bhanulal Saha said that passing of the State GST Bill was mandatory for rollout of the new indirect tax regime. For coal, the reduction will be from 11.69% to 5%, helping lower the cost of power. The maximum tax rate would be in case of hotels that have tariff of more than Rs 5,000.

Prices of foodgrains, especially wheat and rice, will come down as they will be exempt from GST.

For services, the GST Council finalised four tax rates that will apply to services including telecoms, insurance, hotels and restaurants.

"Rates have been finalised for the rest", he said.

Processed food items to be cheaper.

Thus an overwhelming 81 per cent of goods will attract tax of 18 per cent or below.

On Friday, Drabu while terming the GST Council as India's first federal institution, said the new tax regime will pave way for cooperative federalism in the country.

Cars, ACs, refrigerators and aerated drinks will be in 28 percent bracket. Cars will attract three categories of cesses 1, 3 and 15 per cent.

Jaitley further informed that there will be a 12 per cent service tax on non-AC restaurants and service tax in restaurants in five-star hotels will be same as that in ordinary hotels.

Telecom and financial services will be taxed at a standard rate of 18 per cent. However, multiplex operators said that at 28 per cent the industry has not got a fair deal. The consuming states wanted a two per cent GST on jewellery, while other states stuck with five per cent. The exempted list has 229 items at the central level and 99 in the states.

However, the fitment of packed and branded food is yet to be decided. "We hope we don't have to use the weapon (of anti-profiteering authority)", he said. While this would put it nearly the same as the current tax structure, there could be small price benefits for buyers. There is no increase. "We are banking on GST checking evasion and buoyancy in collection", Jaitley said.

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