Jaitley said no taxes were increased today
Next meeting of GST Council is on June 4
List for 1,211 items was finalised yesterday
Healthcare and educational services have been exempted from the purview of the Goods and Services Tax (GST). The decision was taken in a meeting of GST Council led by Finance Minister Arun Jaitley in which the tax bracket for gold was not finalised.
Kerala Finance Minister Thomas Isaac said while “luxury services” would attract the highest rate of 28 per cent, health and education services would be exempt categories.
“There is no increase in taxes of the items considered today. In fact, for many of them, taxes have come down,” Jaitley told reporters. A decision was taken to apply the same four tax rate slabs for services and goods.
Jaitley said that the overall basket of taxes will see a reduction. He hoped for greater tax buoyancy because of greater efficiency and less tax evasion.
“On many commodities there would be reduction because of the cascading effect, but we are banking on the hope that because of a better tax system and less evasion there would be tax buoyancy,” he said.
In a major measure of support to industry, the rate for capital goods, as well as industrial and intermediate items have been set at 18 per cent.
An overwhelming 81 per cent of items will attract tax of 18 per cent or below. Only 19 per cent of items will be taxed at the highest rate of 28 per cent.
NOTHING ON GOLD YET
Kerala Finance Minister Thomas Isaac said that no consensus could be reached on the rate to apply on gold, and that the next meeting of the GST Council has been fixed for June 4.
“We could not come to a decision in this meeting on the rate to apply on gold,” Issac said.
The council had yesterday approved the tax rates for 1,211 items, of which 7 per cent will be exempted, 14 per cent will be in the 5 per cent slab, 17 per cent in the 12 per cent category, 43 per cent in the 18 per cent segment, while 19 per cent of goods will go into the top tax bracket of 28 per cent.
“Services, which are at currently taxed 15 per cent will be fitted into the 18 per cent bracket. However, services will get the benefit of input tax credit for the goods used, so real incidence of taxation will be lower than the headline rate,” Isaac added.
“Telecom services would continue to be taxed at the same rates of the past. Not in a single case has there been an increase in taxes from before,” he added.
TRAVELLING TO BECOME CHEAPER
Revenue Secretary Hasmukh Adhia said travelling on metro, local train, religious travel, Haj yatra will all be exempt from GST.
Economy class air travel will attract 5 per cent GST while the figure will be 12 per cent for business class .
Five per cent GST will be levied on cab aggregators like Ola and Uber.
E-commerce players like Flipkart, Snapdeal will have to deduct 1 per cent TCS (tax collected at source) while making payments to suppliers, he said.