Important meeting of GST Council today; to finalise rates on gold, textiles

New Delhi: An important meeting of the GST Council is scheduled for Saturday to finalise taxes to be levied on six commodities, including gold, textiles and biscuits, as the Centre and states gear up to roll out the new indirect tax regime from July 1.

The Council, chaired by Finance Minister Arun Jaitley and comprising state counterparts, could also consider a review in tax rates of some goods, besides clearing the rules to be followed for proforma of forms to be filled up once Goods and Services Tax (GST) kicks in.

"This meeting is important because it is likely to finalise the rates of tax and cess to be levied on the commodities remaining... Approval of amendments to the draft GST rules and related forms are also on the agenda among others," a Finance Ministry statement said.

The GST Council had last month fitted over 1,200 goods and 500 services in the four tax brackets of 5, 12, 18 and 28 percent. Beside, it had imposed cess over and above the peak rate of 28 percent on demerit and luxury goods.

However, the Council had deferred a decision on the tax rates on six commodities -- biscuits, textiles, footwear, bidis, bidi wrapper leaves (tendu patta), as well as precious metals, pearls, precious or semi-precious stones, coins and imitation jewellery.

According to sources, certain states have pitched for a 4 percent tax rate along with input tax credit on gold so that the effective incidence on the precious metal remains at the existing level of 2 percent.

As regards biscuits, sources said it was discussed in the last meeting of the Council in Srinagar. Certain states sought a zero levy on biscuits which were priced below Rs 100/kg, while the Centre wanted to put it in the 12 percent bracket.

"Biscuits would be a political call," a source said.

Currently, excise duty is not levied on biscuits priced below Rs 100/kg, but states levy VAT.