Final GST Rates Announced: How will it Alter Your Lifestyle?
BENGALURU: On Thursday, the Goods and Service Tax (GST) Council finalized a five-tier GST structure of 5, 12, 18 and 28 pct. While the lower rates are intended for the essential items, the higher rate––28 pct is for luxury and de-merits goods levied with an additional cess. Furthermore, aiming to control inflation, 50 pct of the essential products in CPI basket—including food will be available at a zero pct tax rate.
Finance Minister Arun Jaitley, after reviewing the decisions made at the two-day GST Council meeting, announced that the highest tax slab will be applicable to products currently taxed at 30-31 pct which includes excise duty and VAT.
Jaitley also said that, items such as tobacco, aerated drinks and luxury cars would also be charged with an additional cess along with the highest tax rate. Wherein, the total revenue collected from this additional cess, and the clean energy cess would help to generate a revenue pool. This generated revenue pool would be used for compensating the states facing any revenue loss during the first five years of implementing GST. He further added that the cess would be lapsable after five years.
According to Jaitley, about 
50,000 crore would be required to compensate the states for loss of revenue caused due to the GST. So, absorbing the central and state taxes such as excise duty, service tax and VAT in the first year would be necessary. Although the new structure imposes a 4 pct GST on gold, the council is yet to finalize the decision.
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