GST Council meet: No decision on tax on gold

Image Reuters /Rupak De Chowdhuri

Image Reuters /Rupak De Chowdhuri

The 14th meeting of the GST Council to be chaired by the Union Finance Minister, Mr Arun Jaitley is set to begin here tomorrow with Finance Ministers, Finance Secretaries and other taxation officials from all the states and union territories attending the crucial meet on new tax regime.

It was expected that the Council will also finalise tax rates for gold, gold jewellery today itself but it has put the decision on hold till its next meeting scheduled in June this year.

Most services, except those in the negative list of essential services such as healthcare and education, will come under GST. And since a large part of the fillip a GST gives to consumption comes from the low tax rate, this GST will not do that right now - indeed, the governing principle behind fixing the tax rates was to ensure they were not too different from what is being charged right now under excise/service and VAT; that is also the reason why, though India is moving to a new tax regime, it has imported numerous flaws associated with the older one.

Earlier in the day, Kerala Finance Minister Thomas Issac who is a member of the GST Council had said that services will also attract a four-tier tax slab similar to goods that are being taxed at 5, 12, 18 and 28 per cent. The final list of rates will be placed today before the GST Council.

Earlier, the Rajya Sabha passed four GST Bills without amendments setting the stage for the government for the launch on July 1. Cess will be imposed on these products in addition to GST to raise resources for paying compensation to states for any revenue loss suffered during five years after GST implementation.

"Sin" goods such as tobacco (cigarettes) and pan masala will attract cess rates of 290 per cent and 135 percent respectively, although the impact on current effective consumer prices will be negligible.

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