SKP Group
SKP GST Update
18 May 2017
Key decisions taken on Day 1 of the GST Council Meeting

Finalisation of tax rates
  • Tax rates of 1,211 items (except six) have been fixed. The items falling under different tax rate slabs are given below.
Percentage of total items No. of items (approximate) Tax slab
7% 85 Exempt
14% 170 5%
17% 210 12%
43% 520 18%
19% 230 28%
  • Key items which would be exempt under GST are:
    • Milk;
    • Cereals (branded cereals are under deliberation and may be shifted to the 5% slab); and
    • Jaggery.
       
  • Key items which would be under the 5% tax slab (essential goods) are:
    • Sugar, tea, coffee (except instant coffee);
    • Edible oil (under deliberation and may be added in the list of exempt goods);
    • Coal (tax under the existing system is 11.69%); and
    • Mithai.
       
  • Key items which would be under 18% tax slab are:
    • Hair oil, toothpaste and soap (tax suffered under existing system is 28%);
    • Capital goods; and
    • Industrial intermediates.
       
  • Luxury cars are to be taxed at 28% plus cess.
  • A decision on the rates of small cars below INR 1 million is likely to be taken tomorrow.
  • As per a statement given by the Finance Minister, the rates on all goods have been reduced in GST vis-a-vis the effective tax under the current tax structure.
  • The rate of tax on services is to be decided in tomorrow’s meeting.
 
Finalisation of Rules
  • Seven Rules have been finalised by the GST Council.
  • The Return and Transition Rules are still under examination by the legal team.
 
SKP's comments
  • It appears that the majority of essential commodities would be included in the exempt or 5% tax slab. An exhaustive list of items under different tax rates is expected to be decided and released tomorrow.
  • The industry should be able to finalise decisions placing reliance on the Rules which have been confirmed by the Council.
SKP
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This update contains general information which is provided on an “as is” basis without warranties of any kind, express or implied and is not intended to address any particular situation. The information contained herein may not be comprehensive and should not be construed as specific advice or opinion. This update should not be substituted for any professional advice or service, and it should not be acted or relied upon or used as a basis for any decision or action that may affect you or your business. It is also expressly clarified that this update is not intended to be a form of solicitation or invitation or advertisement to create any adviser-client relationship.

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