One of the key decisions taken is that education and healthcare services will not be taxed under GST.
Telecoms and financial services will be taxed at a standard rate of 18% while transport services will be taxed at 5%.
The Council, headed by Union Finance Minister Arun Jaitley, finalised tax rates for 1211 items with a majority of items kept under a tax rate of 18 per cent.
Market research suggests that GST of 28 per cent plus cess on cigarettes will make many brands of cigarettes slightly cheaper. Saudi Arabia plans to do it in 2018.The CGST Bill also provides for e-commerce companies to collect tax at source at a rate not exceeding 1% of net value of taxable supplies.The new GST Bill is not applicable for the Northeastern and hill states with annual turnover below Rs.10 lakh.
Revenue Secretary Hasmukh Adhia said that an overwhelming 81 per cent of items will attract tax of 18 per cent or below. The service tax rate now stands at 15 percent.
The release of the tax rates in the public domain has happened 40 days before July 1, the day the GST regime kicks in.
Even cereals prices will witness a climb down as they have joined the exempt category compared to the 5 per cent tax rate levied on them. GST rates for commercial vehicles and tractors are at 28% and 12%, in-line with existing indirect tax rates.
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. Luxury cars will attract 28 per cent GST plus a cess of 15 per cent.
"Multiplicity of tax rates for services will add complexity to the compliance in GST regime", he said. Coal is now taxed at 11.69 per cent. "It needs to be appreciated that telecom is a necessity and an extremely important infrastructure service and resource and thus deserves more sensitive treatment", said Uday Pimprikar, Tax Partner, EY India. "Service tax on AC restaurants with liquor licence will be at 18 per cent", he informed.
With the government announcing that 7 per cent of items will remain under the exempt category, the number of items which enjoy zero per cent tax will come down drastically.
Separately, the Indian Beverage Association issued a statement on Friday expressing its disappointment with some aspects of the GST rates. It will be put up for voting on May 25, the last date of the special session of the Assembly, said a BAC member.
18%: Most items including pasta, flavoured refined sugar, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, mineral water, tissues, envelopes, tampons, note books, steel products, printed circuits, camera, speakers and monitors, are under this slab.