Four main slabs under GST fixed

Arun-JaitleyThe Centre and state governments approved of four main tax slabs ranging from 5% to 28% under a proposed Goods and Services Tax (GST), authorities said on Thursday.
Five per cent duty will be levied on items of mass consumption used by commoners, and two standard rates of 12% and 18% will be in force, Union finance minister Arun Jaitley said.
Foodgrains are likely to be exempted from the GST, and tobacco products may be taxed at 40%, he said.
A compensation pool created through cess would be there for five years, Jaitley said.
The long-delayed tax, which would transform Asia’s third largest economy into a single market, could boost revenues through better compliance while making life simpler for business that now pay a host of federal and state levies.
The brackets, discussed at a meeting of the GST Council overseeing plans to introduce the national sales tax next spring, are steeper than the rates of 6, 12, 18 and 26% earlier proposed by the government.

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