GST: Gold Jewellery To Cost More; Apparel, Biscuits, Footwear Cheaper

Apparel up to Rs 1,000, biscuits and footwear will get cheaper, while gold will get slightly costlier from next month as the Centre and states, excepting West Bengal, resolve to roll out GST from July 1.The GST Council, chaired by Finance Minister Arun Jaitley and comprising state counterparts, decided to tax packaged and branded food items at 5 per cent, tendu leaves at 18 per cent and bidi at the highest rate of 28 per cent. Unlike cigarettes, there will be no cess on bidi. While biscuits will be taxed at a flat rate of 18 per cent, footwear costing up to Rs. 500 will be levied a 5 per cent GST and for those above this would be taxed at 18 per cent. In the textiles category, silk and jute fibre have been exempted, while cotton and natural fibre and all kinds of yarns will be levied a 5 per cent GST. Man-made fibre and yarn will, however, attract a 18 per cent tax rate. All categories of fabric will attract a 5 per cent rate. Man-made apparel up to Rs. 1,000 will attract a 5 per cent tax, lower than the existing 7 per cent. Those costing above Rs. 1,000, will continue to attract 12 per cent. Both in the case of footwear and textiles, a major concession has been given, Finance Minister Arun Jaitley said, adding the Council will meet one more time on June 11 to review the preparedness before the July 1 rollout. Currently, biscuits costing less than Rs 100/kg attract an average tax of 20.6 per cent, while those above this price attract 23.11 per cent. Both have been fitted in the nearest tax slab of 18 per cent, Mr Jaitley said. Footwear costing up to Rs. 500 currently attracts 9.5 per cent tax, and in GST it would be taxed at 5 per cent. Rest are taxed between 23.1-29.58 per cent, which in GST regime, would be levied 18 per cent tax. Gold will become slightly costlier as the current incidence is 2 per cent and after extensive debate the Council proposed to tax gold and gold jewellery at 3 per cent. Also, input tax credit can be claimed for gold jewellery manufacture.Mr. Jaitley said while some states wanted a 2 per cent tax rate, others were in favour of a 5 per cent tax on gold, and hence, the Council decided on a vertical division.Check Gold Rates in India Today Solar panel equipment will be taxed at 5 per cent, he said, adding lottery tax is yet to be decided. In all, the Council at its 15th meeting decided on tax rates on 6 items including rough diamond at 0.25 per cent and placed agriculture equipment at two slabs of 5 per cent and 12 per cent. Also, it approved two rules relating to transition and returns forms.The GST Council also decided to amend the transition rules allowing traders and retailers to make claim of 60 per cent against the CGST or SGST dues where the tax rate exceeds 18 per cent. For tax rate below 18 per cent, it will be retained at 40 per cent. The draft transition law provided that once GST is implemented, a company can claim the 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. Mr. Jaitley said the GST Council will meet again on June 11 and review the rates based on industry representations in case the fitment committee finds that there is a substantial increase from the present burden. It will also take up the rules for e-way bill and accounts and records. Also, the company developing the technology backbone for GST -- GST Network-- made a detailed presentation on the amount of work done and IT preparedness. The GST Council in its previous meeting last month had fixed over 1,200 goods and 500 services in the tax bracket of 5, 12, 18 and 28 per cent. Prices of foodgrains, especially wheat and rice, has been exempt from GST. Currently, some states levy Value Added Tax (VAT) on them. While common-use products like hair oil, soaps and toothpaste as also electricity will cost less from July 1. GST will subsume all major levies including excise, service tax and VAT, unifying 16 different taxes, and make India a single market.Goodreturns.in nbsp;