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GST Council Meet: Gold to be Taxed at 3%, 1 July Rollout Finalised

Biscuits to be taxed at 18 percent, while the tax rate for gold is set at 3 percent.

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The Goods and Services Tax (GST) Council has finalised rules related to transition provisions and returns to be filed under the new indirect tax regime, said Kerala Finance Minister Thomas Isaac on Saturday.

The GST Council meeting is currently underway in New Delhi. Finance Minister Arun Jaitley is expected to issue a media statement as soon as the meeting concludes.

BloombergQuint has been able to confirm the tax rates for the following items, as told by the government official quoted above:

  • All footwear below Rs 500 at 5 percent; footwear above Rs 500 at 18 percent
  • Readymade garments at 12 percent; cotton textiles at 5 percent
  • All biscuits to be taxed at 18 percent
  • Beedi likely to be taxed at 28 percent, without a cess
In addition, a Finance Ministry official has said that gold will be taxed at 3 percent. 

Meanwhile, ANI reports that silk and jute are at nil category, while the rate for cotton and natural fiber has been finalized at 5 percent. Footwear below Rs 500 to be taxed at 5 percent and above Rs 500 will be taxed at 18 percent.

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The agenda for the 15th meeting of the GST Council was to clear two important rules relating to transition provisions and returns. The transition rule was deferred as the government is considering to increase the threshold limit of refund for taxes paid on goods in inventory before GST implementation.

The current limit is at 40 percent. The industry had lobbied to hike this threshold. The council had to fix rates for commodities like biscuits, cigarettes, bidis, agricultural equipment, precious metals and textiles. The rate on lottery tickets was also taken up for consideration.

Discussion on the rate of gold has not been taken up till now, Isaac said, adding that the ministers will discuss rates of other items by the end of Saturday.

(This article was first published on BloombergQuint)

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