- The tax rate on gold under GST is still a matter of speculation.
- Mustard oil is to be taxed at 5 percent and processed food is likely to be taxed at 12 percent.
Goods and Services Tax or better known as GST is a proposed system of indirect tax that is expected to bring in a number of tax reforms. After much debate and deliberation, this bill that was first conceptualised in 1999 is most likely to be rolled out on July 1.
GST is a four-tier tax structure with tax rates of 5 percent, 12 percent, 18 percent and 28 percent. Apart from these four, there is also 0 percent tax for basic essential commodities. The essential products will be charged low, and luxury and de-merits goods will draw higher tax rates.
Ahead of the rollout, this crucial tax reform bill is creating some confusion and debates regarding products as well as services and their respective categories for levying a tax.
Here are 5 confusions yet to be sorted out before GST is implemented.
1. Housing, footwear, clothing will be taxed or not: Under GST, half of the goods that fall within consumer price index are not to be taxed. So, food grains that includes rice and wheat will not be taxed but goods like clothing, housing, footwear, bedding also falls into this category and as of now there is no clarity whether these non-food items crucial for retail inflation will be taxed or not.
2. Oil, smartphone, toothpaste much uncertainty: Mustard oil is to be taxed at 5 percent and processed food is likely to be taxed at 12 percent. Meanwhile, soap, toothpaste, smartphones, home appliances like refrigerator is likely to be taxed at 18 percent which is higher considering that much of these products are essential like soap and toothpaste.
3. No clarity about the tax on gold: The tax rate on gold under GST is still a matter of speculation.
Last Updated 31, Mar 2018, 6:32 PM