GST UPDATE: GST COUNCIL MEETING ENDS WITHOUT DECIDING THE RATES

GST Council meeting ends 1 day earlier than its schedule due to lack of consensus in the rate structure. It was decided to fix the rates in its next two meetings to be held on 3rd, 4th and 9th November, 2016. 

In the current meeting held on 18th & 19th October, 4 slab rate structure has been proposed and consensus obtained on the formula for the compensation to the states. 

Now we have to wait for another fortnight to get the rate structure decided by the Council.

OUTCOME OF GST COUNCIL MEETING 1st DAY: 4 SLAB - RATES, CONSENSUS ON COMPENSATION FORMULA TO STATES

Today on 18th October, 2016 in its 1st day discussion GST Council has proposed 4 slab rates viz. 6%, 12%, 18% and 26%. Food items are proposed to be exempt from tax and other necessary items would be taxed at lower rates whereas luxury and demerit goods will be charged at highest rates. Additionally, a cess will be charged on ultra-luxury products, tobacco products and environmentally harmful products. 

The council reached the consensus about the compensation to states which will be limited to taxes subsumed into GST. Base year for the calculation of the revenue shall be 2015-16 and a growth rate of 14% would be taken for calculating revenue of each state for the first five years of the implementation of GST. 

Now to see what outcomes we receive in next 2 days.