The Goods and Services Tax in India follows a four-tier structure of 5, 12, 18 and 28 percent. Though a majority of common utility items have been exempted under the new indirect tax regime, certain products are facing an additional cess over and above the tax of 28 percent.
Minister of State for Finance Shiv Pratap Shukla has said that the GST Council will continue to rationalise rates and the highest tax ceiling of 28 percent will be gradually reduced.
"The GST Council has already taken pro-active measures in rationalising GST rates in the recent past and the trend would continue in future wherever the taxation is deemed to be slightly on the higher side. The 28 per cent GST tax slab would fall as per genuine and legitimate aspirations of the people," said Mr. Shukla was in a statement by PHD Chamber of Commerce and Industry.
In addition to this, the minister stated that all the anomalies and loopholes in the implementation of the new tax regime will be eradicated within the time span of next one year. "Industry should not measure the execution of GST in its first phase of three months since it is such a vast tax reform and the government should be given a minimum of year...for its perfect implementation," Mr. Shukla quoted.
The GST Council brought relief to numerous sectors by deciding to lower the tax rates on 27 items in total. The rates of sliced dried mango, khakra, unbranded namkeen and unbranded ayurvedic medicine have been reduced to 5 percent from the previous rate of 12 percent. Additionally, taxes on stationery items, diesel engine parts, and pump parts has been slashed to 18 percent in comparison to the previous rate of 28 percent. Job works such as imitation, food items, zari and printing items will now be taxed at 5 percent instead of 12 percent.