Finance Minister Arun Jaitley on Monday said that as tax revenues will increase in future, India will have GST slabs of 0 per cent, 5 per cent and a standard rate between 12-18 per cent for commonly-used items. However, luxury and sin goods will continue to be taxed in a higher rate.
Of the 1,216 commodities which are used, broadly 183 are taxed at zero rate, 308 at 5 per cent, 178 at 12 per cent and 517 at 18 per cent, said Jaitley, in a Facebook post titled ‘Eighteen Months of GST’.
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“The 28 per cent slab is now a dying slab,” he said.
“With the goods and services tax (GST) transformation completed, we are close to completing the first set of rates of rationalisation i.e. phasing out the 28 per cent slab except in luxury and sin goods,” he said.
“It could be a rate at some mid-point between the two. Obviously, this will take some reasonable time when the tax will rise significantly. The country should eventually have a GST which will have only slabs of zero, 5 per cent and standard rate with luxury and sin goods as an exception,” Jaitley added.
Making it clear that only auto parts and cement are items of common use which remain in 28 per cent slab, Jaitley said the next priority will be to transfer cement into a lower slab.
“All other building materials have already been transferred from 28 per cent to 18 per cent and 12 per cent. The sun is setting on the 28 per cent slab,” he stressed.
On Saturday, in its last meeting, the GST Council cut rates on 23 items, thereby trimming the 28 per cent slab.