Union finance minister Arun Jaitley said that the new regime will make commodities and services slightly cheaper by removing the cascading effect of taxes. The rates will essentially be based on whether the product is used by a common man or a rich person, he added.
The new regime will put an end to the harassment of businesses by various authorities and there will be a single rate for every commodity across the country, said Jaitley.
He also said that having one rate for all commodities would be highly regressive and thus the Council has decided on multiple GST rates. Besides food articles, which will continue to be zero rated under GST, all the products will be fitted in appropriate tax brackets of 5, 12, 18 and 28 per cent.
A cess will be levied on demerit and luxury goods temporarily for a period of 5 years and its proceeds will be utilised for compensating the states for their revenue losses.
The GST bill is expected to check tax evasion and will help boost GST growth by close to 2 per cent. It is most likely to be rolled out on July 1. (KD)
ALCHEMPro News Desk – India
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