New Delhi. The GST Council has finally announced the four-tier GST rate structure of 5, 12, 18 and 28 percent.
Finance minister Arun Jaitley said that zero-tax rate will be applied to 50 percent of items in CPI basket, including food grains used by common man.
Further he explained, 5 percent duty will be levied on mass consumption items used by common people; 2 Standard Rates of 12 percent, 18 percent will be there in GST.
Jaitley said, items taxed at 30-31 percent (excise plus VAT) will be taxed at 28 percent.
Additional revenue from highest tax slab is to be used to keep essential use items at 5 percent and transferring common items to 18 percent.
Jaitley also informed that compensation pool will be created through cess for five years.
Luxury cars, tobacco, aerated drinks will be be levied with a cess which along with clean energy cess would be used to compensate states for loss of revenue.
The prices of certain consumer durables like televisions, air conditioners, fridges and washing machines may however become cheaper with decrease in taxes.
The government plans to roll out the new indirect tax regime from April 1, 2017.