The GST Council has announced that there will be a four-tier tax structure of five, 12, 18, and 28 percent on various categories of goods during its two-day meeting in Srinagar.
Motorcycles of more than 350 cc engine capacity will attract a 31 per cent tax under the Goods and Services Tax (GST) regime, which will be the same tax on private aircraft and luxury yachts.
The government, on Friday unveiled four rate bands under a new sales tax for services such as telecoms, insurance and restaurants, a move experts feel could complicate compliance and leave businesses at the mercy of an intrusive tax bureaucracy.
Transport services including air services and goods transport will be taxed at 5% from the existing rate of 15%. For air-conditioned restaurants, the tax rate will be 18 percent.
Staying in hotels across Karnataka will, however, be much more cheaper because the state now levies a luxury tax of 8% even on hotels with tariff below Rs 1,000 a night.
According to Sood, while the industry was lobbying for a lower slab, they were rooting for a 5 per cent or a maximum of 12 per cent standard rate.
Refrigerators and ACs will attract a levy of 28%, whereas the life-saving drugs will fall in the 5% tax slab.More news: President Trump's aide comment on West Bank shock Israel
Roy of Deloitte said implementing the provision is fraught with risks as its empowers tax authorities to ask for pre- and post-GST cost sheets from companies of their products.
GST rate for gold and precious metals will be taken up at the next meeting of the Council on June 3. GST will see the base 28% tax and 15% cess taking total taxes on such models to 43% which is lower than current rate which could result in a lower pricing.
Under the new tax regime, there will be a uniform rate of 28% on cars, unlike the multiple rates of tax levied presently. It also finalised the rate of taxation on 80%-90% of items, those that will be exempted from the GST and the 55 items that will invite cess. "GST on services was the main item discussed at the GST meet on Friday", said Jaitley. "The industry had proposed a rate of 5 per cent in our representations to the government, in order to revive a business which has been struggling from lack of fresh investments in new cinema screens and a significant increase in online piracy", Kapur said in a statement.
Aerated drinks and cars will be in 28 percent bracket.
"GST in relation to the services sector was completely adopted in today's meeting".
"The machinery for the anti-profiteering authority may not be ready at present but any change in prices will be called into questioned", Revenue Secretary Hasmukh Adhia said, adding that any fluctuations in prices will be closely monitored.