GST Council Meeting Today: The GST Council on Wednesday decided to put footwear and apparel priced up to Rs 2,500 in the 5% tax slab. Sources gave this information. Till now, only footwear and apparel priced up to Rs 1,000 were taxed at 5% while products priced above this were taxed at 12%.
Goods and Services Tax (GSTFootwear and apparel up to Rs 2,500 will now become cheaper after this decision taken in the GST Council, the highest body that takes decisions on matters related to GST. Finance ministers of states and union territories also participated in the 56th meeting of the GST Council chaired by Finance Minister Nirmala Sitharaman.
According to sources, it has also been decided in the meeting to abolish the tax slabs of 12 and 28 percent. Most of the products in these two categories will be shifted to the slabs of five and 18 percent respectively. This move is expected to provide direct relief to consumers as well as give a boost to the clothing and footwear industry.
What can become cheaper?
According to the proposal, 99 percent of items falling in the 12 percent category like butter, fruit juices and dry fruits will come under the 5 percent tax rate. Apart from this, most of the commonly used items like ghee, dry fruits, drinking water (20 liters), namkeen, some shoes and garments, medicines and medical equipment are likely to be brought from 12 percent to 5 percent tax slab. Commonly used items like pencils, bicycles, umbrellas and hair pins can also be brought under the 5 percent slab.
Prices of certain categories of electronic goods such as TVs, washing machines and refrigerators are also likely to come down as these may be taxed at 18 per cent from the current 28 per cent. Vehicles currently attract a maximum rate of 28 per cent plus compensation cess but may now be subject to different rates. Entry-level cars will be taxed at 18 per cent while SUVs and luxury cars will be taxed at a special rate of 40 per cent.
Will 40% GST be levied on these products?
Apart from this, a special rate of 40 percent will also be applicable on demerit items such as tobacco, pan masala and cigarettes. An additional tax can also be imposed on this category over and above this rate.
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