New Delhi, Nov 3 (KNN) Finance Minister Arun Jaitley today announced that the panel has fixed GST rate at 5%,12%,18%,28% slabs.

Jaitley chaired the GST Council which started its two-day meeting here today to decide on tax rate including the levy of cess and other issues.

In the last meet, the centre had proposed 4-tier tax structure of 6, 12, 18 and 26%, the peak rate being for FMCG and consumer durables.

Jaitley said the 5% duty was on items of mass consumption or aam aadmi products. "There will be standard rate of 12 and 18% on other items."

"Tobacco will fetch 28% sin tax, excluding cess. Aerated drinks will also fetch tax at the same rate. Most white goods to be taxed at 28% but with riders," he said.

The prices of certain consumer durables like televisions, air conditioners, fridges and washing machines may however become cheaper with decrease in taxes.

'Sin items' such as aerated drinks, pan masala, luxury car, tobacco will be taxed at more than 28%, Jaitley announced.

He said a corpus of Rs 50,000 will be needed to cover the compensation to states in the first year.

Jaitley further said that cess and green tax will continue the kitty of state government's compensation.

Apex Industry body for MSMEs, FISME, has welcomed the move and said this has surely removed the deadlock on tax reform in the country.

“5% rate on goods for mass consumption is a welcome step. Although standard rate of 12 and 18% imposed on other items is on higher side,” FISME said.