The Goods and Services Tax Council on Saturday finalised the rates on all the remaining products, including gold, footwear, textiles, agricultural implements, biscuits, and beedis. The Council also cleared the rules regarding return filing, and transitional provisions.
Union Finance, Defence and Corporate Affairs Minister Arun Jaitley, while briefing the media following the conclusion of the one-day meeting, said gold, silver, and diamonds would be placed in a new rate category of 3% while rough diamonds would attract a nominal rate of 0.25%.
Biscuits, currently taxed at a combined State and central tax rate of 20-23%, have been placed in the 18% GST rate category.
The Finance Minister said there was consensus among all the ministers on rolling out the indirect tax regime on July 1, and added that the Council would meet again on June 11 to discuss the remaining rules.
The existing four categories of footwear on which different rates of tax applied have been simplified into two categories, those costing below ₹500 and those costing above this amount. They will be taxed at 5% and 18%, respectively.
Within textiles, silk and jute yarn have been placed in the exempt category, while cotton and other natural fibre will be taxed at 5%. Man made yarn will attract a rate of 18% while natural yarn will be taxed at 5%. All fabric will be taxed at 5%. Apparels and made-ups priced below ₹1,000 will be taxed at 5% and those above ₹1,000 will be taxed at 12%.
Beedi leaves, currently taxed at anywhere between 5% and 28%, depending on the State, will be taxed at 18%. Beedis will be taxed at 28%, with no additional cess being levied. Agricultural implements will be taxed at 5%.
“There was almost a vertical division in the Council regarding the tax treatment of gold, with half wanting 2% and the other half wanting 5%,” Mr Jaitley said. “So, it was decided to tax it at 3%.” The creation of a new tax slab could, however, create problems for the GST Council as it will encourage other sectors to make demands for a similar treatment, according to experts.
