GST re­lief: Rate cut on 178 items

28% slab has only 50 items; move to cost `20,000 crore

DNA (Delhi) - - FRONT PAGE - DNA Cor­re­spon­dent cor­re­spon­dent@dnain­

New Delhi: The Goods and Ser­vices Tax (GST) Coun­cil gave re­lief to con­sumers and in­dus­try on Fri­day and de­cided to re­duce rates for 178 items — mainly mass con­sump­tion prod­ucts — to 18 per cent from the ear­lier 28 per cent. Th­ese items in­clude fur­ni­ture, de­ter­gents, sham­poos, hair dyes, beauty prod­ucts, per­fumes, fans, lamps and mat­tresses.

Eat­ing out in restau­rants — both AC and non AC — would also be­come cheaper as they have been moved to the tax rate of 5 per cent from the 18 per cent ear­lier. How­ever, an In­put Tax Credit which was given to restau­rants will now be with­drawn. Though restau­rants in starred ho­tels with room rent above Rs 7,500 will con­tinue to at­tract GST of 18 per cent with ITC ben­e­fit. The new rates will be ap­pli­ca­ble from Novem­ber 15.

The 28 per cent slab — the high­est un­der GST im­ple­mented from July 1 — has now just 50 items, in­clud­ing parts of au­to­mo­biles, wash­ing ma­chines, re­frig­er­a­tors, paan masalas and cigars, from the pre­vi­ously 227. GST has five tax slabs of 0 per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent.

“In ef­forts to­wards ra­tio­nal­is­ing the GST struc­ture, the Coun­cil has been re­vis­ing rates from time to time. In the last three meet­ings, we have sys­tem­at­i­cally re­moved items from 28 per cent slab and ra­tio­nalised to lesser cat­e­gories,” Fi­nance Min­is­ter Arun Jait­ley said af­ter the 23rd meet­ing of the GST Coun­cil in Guwa­hati.

“There were 227 items in the 28 per cent slab. The fit­ment com­mit­tee had rec­om­mended that it should be pruned to 62 items. But the GST Coun­cil has fur­ther pruned 12 more items,” Bi­har Deputy Chief Min­is­ter Sushil Ku­mar Modi said.

He said all types of chew­ing gums, choco­lates, prepa­ra­tions for fa­cial make-up, shaving and af­ter-shave items, sham­poos, de­odor­ants, wash­ing pow­der de­ter­gents, be­sides gran­ites and mar­bles will at­tract 18 per cent GST.

Paints and ce­ment have been re­tained in the 28 per cent tax bracket. Even lux­ury goods like wash­ing ma­chines and air con­di­tion­ers have been re­tained at 28 per cent.

The de­ci­sion taken by the GST Coun­cil will have a rev­enue im­pli­ca­tion of Rs 20,000 crore an­nu­ally, ac­cord­ing to es­ti­mates.

“There is con­sen­sus that slowly the 28 per cent slab should be brought to 18 per cent. But it will take some time be­cause it has a big rev­enue im­pli­ca­tion,” Modi said.

The re­turn fil­ing process has also been sim­pli­fied. All tax pay­ers who have small tax li­a­bil­ity or no li­a­bil­ity will be able to file re­turns in just 2-3 steps. It came to the no­tice that 30-40 per cent of fil­ers had nil re­turns to be filed. Busi­nesses with turnover of less than Rs 1.5 crore will have to file re­turns once in a quar­ter — for in­stance July-Septem­ber re­turns can be filed by De­cem­ber-end. For Oc­to­ber-De­cem­ber. by Fe­bru­ary 15 and for Jan­uary-March, by April 30 next year.


Fi­nance Secy Has­mukh Ad­hia and Fi­nance Min­is­ter Arun Jait­ley

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