Goods and Services tax Council, chaired by Finance Minister Arun Jaitley, has come up with 4 slabs structure of GST starting from 5% to 28%. It is considered to be biggest reform in indirect taxes, which will be beneficial to everyone , especially the middle class.
Government plans to roll out the new tax structure from 1st April 2017 and also decided to introduce the bill in upcoming winter’s parliamentary session. There would be four slabs ranging from 5%,12%, 18%, and 28%. This has been done to keep inflammation under check. As according to government these reforms will be beneficial to the Middle class people as food grains will be taxed at Zero rates. 5% would be the lowest range for the common utility products like edible oils, spices, chicken, tea , coffee and many more food staples. As the current slab of these items are up to 9 %.
The slab of 12% and 18% would the standard ranges including most products like Computers, Processed food, Small cars , Mobile phones and many more which faces higher tax rates could become cheaper as they are likely to be placed in standard tax slab.
The highest slab would be of 28% and applicable on the items which currently taxed at 30-31%. Television , Refrigerators , Washing machines , most of the White goods, Tobacco , Aerated drinks , Pan masala and etc.
Under the four-tier structure of GST bill, goods those are currently taxed between 3-9 percent will come under 5% , those in 9-15 % slab will come under 12% slab those products which are currently taxed between 15-21 percent would attract 18 percent levy, while those above 21 percent would be taxed at the peak rate of 26%. Gold and other precious metals range is yet to be decided but considered likely to be low.
So, this multi-layer structured Goods and Service tax reforms have planned according to the categories, utilities and credibility of different segments of society. With a motive of protecting the Middle class from price shock.