At a meeting of the GST council held in Srinagar on Thursday, the taxing slabs of 1,211 items were determined under the GST (Goods and Services Tax) regime, which is due for a July 1 rollout.
Cereals in general, which are subject to 5 percent tax in the current regime, will be exempt from GST under the new directives. Consumer products like hair oil, soap and toothpaste will be classified under the 18 percent tax category. Tooth paste, hair oil, soaps will be taxed at 18 per cent, instead of the current 28 per cent. Indian sweets, that is, mithai, will be categorised in the 5 percent bracket.
There is no increase in taxes of items considered today. In fact, for many of them, taxes have come down, Jaitley told reporters, as reported by Hindustan Times.
The GST rates for goods like gold and beedi, and services are to be decided in a meeting that will be convened on Friday, and the congregation may come together once again, if any decisions remain pending.
The other items which will be exempt from tax are being deliberated upon. States like Uttar Pradesh are lobbying for keeping puja material exempt, while a few other states want cotton yarn and silk yarn out, as reported by The Economic Times. So, most states are suggesting keeping state-specific items out of the list altogether.
The GST, once the dust settles after this paradigm shift in India’s tax regime, is expected to boost India’s economic growth by up to two percentage points.