GST Council · 2016-11-03 · New Delhi

4th GST Council meeting: key decisions

Over 3 and 4 November 2016 the Council settled the basic rate architecture of GST. It agreed to a four-slab structure of 5, 12, 18 and 28 per cent, with a cess above the top rate on luxury and demerit goods to fund compensation to States. A Compensation Fund was to be created to receive the cess. Dual control over taxpayers was also discussed but not settled.

Chaired by Arun Jaitley, Union Finance Minister.

Rates

  • Adopted a four-tier GST rate structure of 5, 12, 18 and 28 per cent, with a large share of essential items in the nil category.
  • Agreed that the 28 per cent band would generally cover goods currently bearing combined indirect taxes at about that level or more, with scope to move some to 18 per cent.
  • Agreed to levy a cess over and above 28 per cent on goods such as luxury cars, aerated drinks, pan masala and tobacco products, broadly to maintain the existing tax incidence.

Other

  • Decided that the cess proceeds would be credited to a Compensation Fund in the public account, used to pay compensation to States for five years.
  • Continued discussion on administrative control over taxpayers between the Centre and States without a final decision.

Official documents

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