GST Council clears all rules; states agree on 1 July roll-out
03 June 2017
The Goods and Service Tax (GST) Council at its meeting today cleared the pending rules, including transition provisions and returns and also approved the rates for remaining items, including gold, footwear and biscuits, with all states agreeing to a 1 July rollout of the new indirect tax regime.
The GST Council decided to tax gold at 3 per cent, footwear below Rs500 at 5 per cent and biscuits at 18 per cent under the Goods and Services Tax, which will be rolled out from 1 July.
The Council, chaired by finance minister Arun Jaitley, at its 15th meeting also decided on rates of yarns, agriculture machinery, apparels and rough diamonds among others.
The council, Jaitley said, will again meet on 11 June, before the roll out of the new indirect tax regime.
The all powerful council has also finalised the GST rules regarding transition and return filings.
Jaitley said the council was also apprised of the IT preparedness which is necessary for the successful roll out of the GST.
"GSTN made a detailed presentation on the amount of work done and IT preparedness," he told reporters after the meeting.
Jaitley said footwear costing below Rs500 will be taxed at 5 per cent, while that above this amount will attract 18 per cent levy. Currently, footwear priced from Rs500 to Rs1,000 attracts 6 per cent excise duty. Besides, states levy VAT on it.
Readymade garments will attract a levy of 12 per cent. Solar panels will be taxed at 5 per cent under GST.
Tendu leaves and bidis would be taxed at the rate of 18 per cent and 28 per cent, respectively, the finance minister said, adding that there will be no cess on bidis.
On the other hand, rough diamonds will attract a levy of 0.25 per cent.
For footwear and textiles, Jaitley said that a major concession has been given and the items being used by the common man will be taxed at low rates.
As per the draft transition law, once GST is implemented a company can claim credit of up to 40 per cent of their Central GST dues for excise duty paid on stock held by businesses prior to the rollout.
Several dealers are choosing to wait and watch rather than buy and hold on to inventories. They have lobbied with the government seeking an increase in the credit limit.
The GST Council has already fitted over 1,200 goods and 500 services in the tax bracket of 5, 12, 18 and 28 per cent last month.
The GST Council also discussed the implementation of anti-profiteering clause.
GST will subsume all major levies, including excise, service tax and VAT, unifying 16 different taxes, and make India a single market.