The government has planned to roll out the new indirect tax regime, Goods and Services Tax (GST), from April 1, 2017. Centre has proposed a 4-tier GST rate structure.
According to a report by Times Of India, “The lowest rate proposed is 6 percent, with two standard rates of 12 and 18 percent. The peak rate, which will mostly apply to FMCG and consumer durables, will be 26 percent. Besides, a cess is also likely to be levied on demerit or sin goods and polluting items.”
An additional cess over and above 26 per cent for luxury and demerit goods has been proposed for the purpose of funding compensation to states in case of revenue loss after the GST rollout.
Application of the GST will make manufacturing cheaper, and services costlier.
Under the proposed 4-slab structure, the items which are currently taxed between 3-9 percent will fall in the 6 percent bracket; those in 9-15 per cent range will come under 12 percent rate.
What will get costlier:
What will get cheaper:
The Council will meet again on November 3-4 to iron out pending issues and proceed with the implementation formalities.