The Good Services Tax Council on Friday fixed the GST rates for products and services in four tax slabs of 5%, 12%, 18% and 28% along with additional cess of selected products and services. The all-powerful council has also exempted some products such as food grains, fresh vegetables, meat, contraceptive as well as services like education and healthcare have also been kept tax free.
Announcing the decision made by the GST council, the Finance Minister Arun Jaitley, said there will be no inflationary impact as most of the rates which are at 31 per cent have been brought down to 28 per cent.
Jaitley said the key feature of rate decision has been that “tax rate under GST will not go up for any of the commodities. There is no increase. On many commodities, there is a reduction particularly because the cascading effect of tax is gone.”
“Of several commodities, we have consciously brought down the tax. In the overall basket there would be a reduction, but we are banking on the hope that because of a more efficient system, evasion would be checked and tax buoyancy would go up. That despite reduction the revenue neutrality and tax buoyancy thereafter would be maintained,” he added.
However, due to increased cess, some products and services will register a sharp drop in rates, while other will register price hike after GST is implemented on July 1.
Let's have look at change in prices of products and services: What will be expensive and what will be cheaper