"If the revenue collection, post GST implementation would not be 14 per cent more than the previous year, the Centre would compensate the remaining amount to the state from GST compensation fund", said finance secretary T K Pandey. It has been decided that the rate for capital goods and industrial intermediate items will be taxed at 18 per cent.
Jaitley had earlier this month expressed confidence of the GST Council arriving at tax rates in the May 18-19 meeting.
The next meeting will be held on June 3.
At the meeting held today, the tax rate of almost 1,205 items were finalised. There were 6 products on which the Council members could not arrive at consensus to fix the taxation rate, as per reports. "We are extremely disappointed with the GST rate decision as it will make telecom services costlier for the consumer, reduce voice and data consumption levels, which in turn, will hit telco bottomlines in the coming quarters".
He said the GST Council has begun discussion on the list of items that will attract zero per cent tax. However, the government is yet to decide the GST rate for branded cereals.
GST rate of food grains is yet to be finalised, reported NDTV.
Soap, hair oil and toothpaste would be charged at 18 per cent of GST. It will replace 16 current levies - seven central taxes like excise duty and service tax and nine state taxes like VAT and entertainment tax - thereby creating India as one market with one tax rate. Uttar Pradesh government have reportedly demanded "puja materials" to be exempted.
The exemption list is supposed to include common use items like salt, primary produce, fruits and vegetables, flour, salt, milk, eggs, tea, coffee and prasad sold at temples.