GST council first day meet
The GST council on 1st of its 3day meeting held on 18/10/2016 discussed various alternatives of GST rate structure but no decision was taken.
A four rate slab structure with cess
1) 6% for precious metal and essential food items
2)12% for FMCG and food
3) 18% standard rate
4) 26% for ultra luxury and demerit items, being levied was discussed.
Finance minister said that Rate should be such that does not add inflation to consumer but at the same time protect the revenue of centre and state.
Base Year for calculating the revenue of a state would be 2015-16 and secular growth of 14% would be taken for calculating the likely revenue of each of state in the first five years of implementation of GST.
The cess would help to create a compensation fund for states for any revenue loss and it would be limited to taxes subsumed into GST.
Food items are proposed to be excluded from tax and 50% of items of common usage will be exempt.
Kerala FM said that his state government wanted the highest rate to be fixed at 30% so that common man items may either be exempted or kept at lower rate.