GST Meet: Centre proposes 4 tax slabs, an additional cess on sin goods
The FM said that the Centre will try to generate maximum resources with minimum burden on common man. “The principle is clear, the rate should be inflation neutral, it should generate adequate resources for the Centre and the states and the taxpayer should not be
New Delhi: The Union Finance ministry has proposed four slabs for the Goods and Service Tax (GST) during the first meeting of three-day meet of the GST council. The Centre proposed the four slabs of 6 per cent, 12 per cent, 18 per cent and 26 per cent along with a four per cent levy on gold.
In addition to the mentioned tax slabs a cess has also been proposed by the centre on sin and luxury goods that will help it mop up close to Rs 50,000 crore to compensate states for any possible revenue loss under the new tax regime.
Revenue Secretary Hasmukh Adhia said that apart from the four tax slabs an additional cess has been suggested for environmentally sensitive items such as coal (where a cess is already in place), sin goods such as aerated drinks, tobacco and pan masala and luxury cars and watches.
“The cess on coal fetches Rs 26,000 crore annually while the tax on sin and luxury goods is expected to help the Centre collect another Rs 24,000 crore. The new cess would ensure that the levy on these items was not changed and the money raised would flow into a special fund to meet compensation requirements,” he stated.
What Arun Jaitley said about the proposed tax slab:
- The Finance Minister said that the government has proposed to bring consumer durables and a large number of FMCG products in the 26 per cent bracket.
- He, however, said that the goods or services wise classification will only be done once the states agree to the slabs.
- The FM said that the Centre will try to generate maximum resources with minimum burden on common man. “The principle is clear, the rate should be inflation neutral, it should generate adequate resources for the Centre and the states and the taxpayer should not be burdened," said Jaitley.
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