There will be four rates for services at 5, 12, 18 and 28 percent, similar to tax slabs for goods. Healthcare and education will be exempted from GST.
The tax rate on gold has not been finalised yet. The GST Council will meet again on June 3.
The GST rates for all but six items were finalised at the first day of the two-day meeting of the GST Council, headed by Union Finance Minister Arun Jaitley and comprising state representatives.
Out of the 1,211 items, the GST rate for all but six was decided on the first day, he said.
“Rates have been finalised for the rest,” he said, adding GST for packaged food items is to be finalised later.
“(With) the standard rate items of 12.5 percent and 15 percent, plus the cascading effect of local taxes, the tax rate was going up to 30-31 percent. These 30-31 percent taxes… Have all been brought down to 28 percent.
“Of these, some are items to be used by common man soap, oil — that has been brought down to 18 percent. So there will be a substantial reduction as far as those items are concerned. We have kept one criteria in mind that the overall impact is not inflation, in fact it brings down the costs,” Jaitley added.
Revenue Secretary Hasmukh Adhia said 7 percent of the items fall under the exempt list while 14 percent have been put in the lowest tax bracket of 5 percent. Another 17 percent items are in 12 percent tax bracket, 43 percent in 18 percent tax slab and only 19 percent of goods fall in the top tax bracket of 28 percent.
As many as 81 percent of the items will attract 18 percent or less GST.