Large cars with an engine capacity greater than 1500 cc, and SUVs with a length of more than 4 m and engine capacity greater than 1500 cc, will attract a cess of 15 per cent.
Motorcycles with an engine capacity of more than 350 cc will attract 3 per cent cess and an equal amount of levy will be applied on aircraft for personal use and yachts.
A decision on the tax rate for six categories of items, including gold, beedi, textile, footwear, agricultural implements and packaged/branded food items, was kept in abeyance and is likely to be taken up for discussion on Friday.
During the course of Thursday’s meeting, some states objected to the categorisation of all packaged/branded food items in the 5 per cent category, considering flour, especially wheat flour, is an item of mass consumption, said a state finance minister.
Also, some states raised concerns regarding the impact of categorisation of items in the tax slabs of zero, 5 per cent, 12 per cent, 18 per cent and 28 per cent on their respective revenues, another state finance minister said, adding that there are concerns among states whether these rates are revenue-neutral or not.
Speaking to reporters, Union Finance Minister Arun Jaitley said, “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 on tax is gone. 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.”
Revenue Secretary Hasmukh Adhia said that about 7 per cent of the total 1,211 items have been exempted, 14 per cent of the items are in the 5 per cent tax slab, 17 per cent of total items are in 12 per cent tax slab. About 43 per cent of items will attract 18 per cent tax rate, while only 19 per cent will be in the 28 per cent tax slab, he added.
Citing the crucial role of coal in power and industrial production, Adhia said, the tax rate on coal has been reduced significantly to 5 per cent from the existing tax incidence of 11.69 per cent. The cess on coal, which was earlier decided by the Council to be levied at Rs 400/tonne, will continue to be imposed and the collections would flow into the compensation fund, he added.
During the course of the meeting, many states presented region-specific proposals. J&K; proposed to keep handloom and handicrafts in the zero per cent category, a demand which was supported by north-eastern states. Uttar Pradesh proposed that cotton yarn, silk yarn, puja material be exempted under the GST regime.
News Source- Indian Express