‘GABBAR’ KNOCKED OUT OF GST

PRICE BONANZA: Only 50 items will remain in 28 % slab, mostly luxury items and sin goods; 178 other articles move to 18 % bracket; daily grocery to be cheaper; Eating out will attract a uniform 5% tax

In the biggest GST rejig yet, tax rates on over 200 items, ranging from chewing gum to chocolates, to beauty products, wigs and wrist watches, were on Friday cut to provide relief to consumers and businesses amid economic slowdown.

As many as 178 items of daily use were shifted from the top tax bracket of 28 per cent to 18 per cent, while a uniform 5 per cent tax was prescribed for all restaurants, both air- conditioned and non-AC. Currently, 12 per cent GST is levied in non-AC restaurants and 18 per cent in airconditioned ones.

Finance Minister Arun Jaitley said the restaurants were not passing on the input tax credit (ITC) to customers and so the ITC facility is being withdrawn and a uniform 5 per cent tax is being levied on all restaurants.

However, restaurants in starred-hotels that charge Rs 7,500 or more per day room tariff will be levied 18 per cent GST but ITC is allowed for them. Those restaurants in hotels charging less than Rs 7,500 room tariff will charge 5 per cent GST but will not get ITC.

The all-powerful GST Council pruned the list of items in the top 28 per cent GST slab to just 50 from the current 228. So, only luxury

and sins goods are now in highest tax bracket and items of daily use are shifted to 18 per cent.

Also, tax on wet grinders and armoured vehicles was cut from 28 per cent to 12 per cent, the tax rate on six items reduced from 18 per cent to 5 per cent, on 8 items from 12 per cent to 5 per cent and on six items from 5 per cent to nil.

Chewing gum, chocolates, coffee, custard powder, marble and granite, dental hygiene products, polishes and creams, sanitary ware, leather clothing, artificial fur, wigs, cookers, stoves, after-shave, deodorant, detergent and washing power, razors and blades, cutlery, storage water heater, batteries, goggles, wrist watches and mattress are among the products on which tax rate has been cut to 18 per cent.

The top tax rate is now restricted to luxury and demerit goods like pan masala, aerated water and beverages, cigars and cigarettes, tobacco products, cement, paints, perfumes, ACs, dish washing machine, washing machine, refrigerators, vacuum cleaners, cars and twowheelers, aircraft and yacht.

The cut in tax will cost the exchequer Rs 20,000 crore in revenues annually, Bihar Deputy Chief Minister Sushil Kumar Modi said. Launched on July 1, the GST weaved 29 states into a single market with one tax rate but while traders and small business complained of increased compliance burden, voices of dissent rose on high tax rate on some common use goods.