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GST: Education, healthcare exempted; decision on gold later

The GST Council on Friday finalised tax rates for services. The tax rates will be 5, 12, 18 and 28 percent – in line with those applying to goods.

Education and healthcare have been exempted from the GST regime.

Services of five star hotels, cinema halls and club betting, etc. will attract the highest rate of GST at 28 percent seen as they are as a luxury service.

Hotel rooms and AC Hotels with rents between Rs 2500 to 5000 will attract a GST rate of 18 per cent whereas hotel rooms with tariffs less than Rs. 1000 will be kept in zero % tax .

Publicity and financial services have been kept in the 8 percent slab .

Transportation services have been kept in the 5% category. Railways and economy class flights will also be taxed at 5 percent. Business class people will have to give 12 percent GST.

The long-awaited GST has been hailed as India’s biggest tax overhaul since Independence in 1947. GST regime will usher in lower taxes, seamless input tax credit, logistics savings and market share swings from unorganised to organised players.

The GST Council had also approved tax rates for 1,211 goods. 7 % goods will be exempted and majority of the goods will be in the 18% slab. The tax rate on gold has not been finalised yet. A call on it may be taken on 3 June when the GST Council meets again.

In the two-day meeting of the GST Council, the tax rates on 80 to 90 percent of the items have been determined. Four levels of rates have been kept in the proposed GST system, in which the minimum rate of five percent has been kept on the essential items of everyday use. GST is planned to be implemented from July 1. According to the decision taken in GST Council meeting:


0% TAX on everyday goods needs

–milk, butter milk, curd, honey

— fruits and vegetables, flour, gram flour, bread

—- salt, newspaper, bangles handloom

The following goods are in the 5% tax slab

–fish fillet, cream, skimmed milk powder, branded paneer

–Frozen vegetables, coffee, tea, spices

– Pizza bread, juice, sago, kerosene, coal

– Medicines, stents and lifeboats

12 percent tax on essential items

-Frozen Meat Products, Butter, Canned Dry Fruits, Animal Fat

–sauce, fruit juice, bhujia, snacks, ayurvedic medicines, tooth powder

– color books, picture books, umbrellas, sewing machines and cell phones

18% tax on these items of middle class

—flavored refined sugar, pasta, cornflakes, pastries and cakes

— Pre-made Vegetables, Jams,, Soups, Ice Creams, Instant Food Makes

-3-Mineral Water, Tissue, Envelopes, Notebooks, Steel Products

4 – Printed circuits, cameras, speakers and monitors

28 percent tax

–Pan Masala, Paint, Shaving Cream, Hair Shampoo, Dye, Sunscreen, Wallpaper

– Ceramic tiles, water heater, dishwasher, sewing machine

– Washing machines, ATMs, vending machines, vacuum cleaners

– Automobiles, motorcycles, aircraft and boats for personal use

Finance Minister Arun Jaitley says GST bill is going to be consumer friendly as it will bring down inflation.

(GST) is termed as the largest tax reform in the history of the country.In the council meeting decision has been taken to exempt education, health care services from GST will replace a bundle of indirect taxes imposed by the centre and the states and is expected to bring down tax leakages.


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