An overhauled and simplified goods and services tax (GST) regime with only two main rates rates, 5% and 12%, will be implemented from September 22.
This was decided after a marathon meeting of the GST Council, the apex decision-making body on indirect taxes, headed by Union Finance Minister Nirmala Sitharaman and comprising representatives of all states.
Rates on common use items such as hair oil, soaps, bicycles, reduced to 5% from 12% or 18%.
Individual insurance policies, roti, paratha and life-saving drugs, will not attract any GST, Sitharaman said..
Bihar Deputy Chief Minister Samrat Choudhary said that all states were on board for the rate rationalisation, and it was a consensus-based decision.
West Bengal Finance Minister Chandrima Bhattacharya said the total loss due to GST rate rationalisation would be ₹47,700 crore.
Sitharaman said demerit goods such as tobacco, pan masala, private planes and yatchs, luxury cars, mottorcyles above 350 cc and carbonated drinks would attract a special 40% rate.
While other rates will be implemented from September 22, tobacco products and cigarettes will continue to attract 28% GST, plus compensation cess, till loans taken to compensate states are repaid.
“Glad to state that@GST_Council, comprising the Union and the States, has collectively agreed to the proposals submitted by the Union Government on GST rate cuts & reforms, which will benefit the common man, farmers, MSMEs, middle-class, women and youth,” Prime Minister Narendra Modi said.
{{/usCountry}}“Glad to state that@GST_Council, comprising the Union and the States, has collectively agreed to the proposals submitted by the Union Government on GST rate cuts & reforms, which will benefit the common man, farmers, MSMEs, middle-class, women and youth,” Prime Minister Narendra Modi said.
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