Outcome of fourth meeting of GST Council

the fourth meeting of GST Council-

Four-tier GST rate structure would be 5%, 12%, 18%, 28%, finance minister Arun Jaitley told reporters after the meeting. The finance ministry had earlier proposed to have 6%, 12%,18%, and 26%. 

Most of the food items would attract a zero% rate. As much as 50% of the consumer price index would be zero-rated. 

A 5% rate would be on other necessary goods such as soaps and others needed for daily uses.

Earlier proposal of the finance ministry to have 26% would be hiked to 28% but many items that were to attract 26% earlier would be brought down to 18%. These would include some white goods. 

The above 28% would be a cess to be imposed on luxury cars, aerated drinks, and tobacco. 

Kerala finance minister Thomas Isaac instead had pitched for a GST rate of 40% above 28% on these items.  

The proposal of cess was made by the union finance ministry. 

This cess, coupled with one on clean energy, would yield the government Rs 50,000 crore, which is expected to be revenue loss for states in a year. However, a cess would be reviewed every year on the basis of revenue loss to states. 

The earlier proposal of levying a 2% rate on gold was put on hold. The duty on gold would be decided later after assessing the impact of these GST rates. 

The council would now take up the issue of administrative control on assessments on Friday.