The rate of tax on goods was largely on expected lines, except the fact that about 19% of the items have been classified under the 28%-rate slab, which is much more than what industry was expecting. The initial understanding was that this rate would apply to a few products, as outlined in the Chief Economic Advisor’s report, but the government later indicated that several other items, which attract an effective rate of over 25% at present, could feature in this slab, too. So, products like consumer durables, cosmetics, several food items including chocolates & nutritional products, suitcases & bags, etc, find themselves in the category of ‘luxury goods’ to be taxed at 28%. While the current effective rate is 24-26% for many of these products, there are few where the current effective rate is below 20%, like in the case of UPS and inverters. The council may want to review such cases and take corrective action wherever needed.
via GST rate baskets: Not all that was hoped for, but holding promise – The Financial Express
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