The GST Council finalised four tax rates of 5, 12, 18 and 28 per cent for services including telecom, insurance, hotels and restaurants under the biggest tax reform since the Independence. The GST Council has fitted the goods and services in tax brackets of 5, 12, 18 and 28 per cent.
The government said the council's focus was to keep the tax rate low on affordable goods or services, progressively raising it for those that can be counted as a luxury.
Economy class air travel will attract 5 per cent GST while business class will be charged 12 cent, he said.
GST rates have also been finalized for various types of hotels and restaurants.
"(With) the standard rate items of 12.5 percent and 15 percent, plus the cascading effect of local taxes, the tax rate was going up to 30-31 percent. "If the 28 per cent tax rate and an additional cess of 15 per cent is levied ... then vehicle prices technically would come down. Companies may or may not structure their tariff as per provision of refund but customers will have to pay 18 percent tax everytime bill is generated so consumers will be hit under GST", Mathews said.More news: Trump tells Russians Comey was a 'nut job'
The highest rate of 28 per cent tax would be levied on luxury services such as races, betting and cinema halls. Rates are 18 per cent for household goods such as soaps and 28 per cent for durables such as cars. GST rates for commercial vehicles and tractors are at 28% and 12%, in-line with existing indirect tax rates.
Once GST becomes operational on July 1as expected, it is feared that it will be hard for both turf clubs to survive another year due to the cascading effect of the new tax regime. "We can only hope that is agreed to when valuation rules are more clearly defined". "Given the information available to us, it seems that entry level cars could see an escalation in taxes, leading to certain increase in prices", said Rakesh Srivastava, Director (sales & marketing) at Hyundai.
Of two, efficiency in goods will be higher than that in services, Crisil said in a note.
Tomorrow's meeting will also decide on the rate of tax for services, he said.
As many as 81 per cent of the items will attract 18 per cent or less GST.More news: Wall St set to open slightly higher as oil prices jump
AC train travel will attract 5 per cent service tax, same as freight levy.
The rates are in line with those finalised for goods.
With a better system in place, compliance will improve, he declared.
Items like sugar, tea, coffee (barring instant coffee), edible oil, mithai, and newsprint have been placed in the lowest slab of 5 per cent, their prices will not be affected.
Jaitley promised that the Centre will do all it can in restructuring the GST implementation for Jammu and Kashmir keeping in mind the special status of the state, an official spokesman said here.More news: Google Play Award winners announced, highlighting best app and games for 2017
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