Movies, monitors, video games to cost less: Jaitley
Computer monitors, TV screens, video games, lithium-ion power banks, retreaded tyres, wheelchairs and cinema tickets are among products and services set to get cheaper as they have been removed from the highest 28% bracket under the Goods and Services Tax (GST) regime, Finance Minister Arun Jaitley announced on Saturday. Among the items consumed by the common man, only cement continues to remain, along with luxury and “sin” goods, in the 28% bracket as the GST Council brought down the rates of all other categories of goods in a further rationalisation of rates that left only 28 items in the highest tax slab. A total of 17 items and six services have been reduced which will result in a revenue impact of Rs 5,500 crore for the full fiscal, Jaitley said, briefing reporters here after the 31st meeting of the Council. "There are 28 items left in the 28% bracket if we include ‘luxury and sin items’, and items used by economically well-off sections of the society, only one item of common man's usage—cement— remains in the bracket," Jaitley said.
Second-hand tyres, video games, monitors and television screens up to 32 inches, and lithium battery power banks will now attract 18% GST.
The GST on wheelchair accessories has been brought down to 5 per cent from the existing 28, which will also allow the payment of input tax credit that is not possible with zero tax," Jaitley said.
Air conditioners and dishwashers have been left un- touched at the highest rate because these are not items of common use in India, he said.
Nearly 1,250 goods and services have been categorised under the four tax slabs of 5, 12, 18 and 28% under the GST regime.
Cutting the rates on cement and automobile parts would mean a combined revenue loss of Rs 33,000 crore, which the Council felt is "too steep" to be considered at this juncture, Jaitley said.
While the GST on third party motor vehicle insurance has been cut from 18 to 12%, cinema tickets up to Rs 100 have also been granted a similar reduction. Movie tickets costing more that Rs 100 have been brought down from 28% to 18%. "It's a mass entertainment medium and its revenue impact is about Rs 900 crore," the Finance Minister said on the reduced tax on movie tickets.
GST on solar power generating plants and renewable energy items have also been reduced, he added.
This major tax rationalisation ahead of the 2019 general elections comes after Prime Minister Narendra Modi recently promised to bring 99% of the goods under the 18% or lower GST slab. Meanwhile, the GST Council on Saturday gave its approval to the creation of a Centralised Appellate Authority for Advance Ruling (AAAR) by amending the GST Act. According to the Ministry of Finance, the GST Council in its 31st meeting gave in-principle approval to the creation of AAAR to deal with the cas- es of conflicting decisions by two or more State Appellate Advance Ruling Authorities on the same issue.
In addition, the Council also approved amendments to "Section 50 of the CGST Act", which would allow interest to be levied only on the net tax liability of the taxpayer, after taking into account the admissible input tax credit. "The above recommendations of the Council will be made effective only after the necessary amendments in the GST Acts are carried out," the Ministry said in a statement. The GST Council also decided to form a sevenmember Group of Ministers (GoM) to study anomalies in tax collection in some of the states which showed wide deviation from what was expected. "The Council has approved the proposal to form a seven-member GoM to study the revenue trend, including analysing reasons for structural patterns affecting revenue collection in some of the states," Finance Minister Arun Jaitley said after the meeting. The study would include the underlying reasons for deviation from revenue collection targets vis-a-vis original assumptions discussed during the design of the GST system, its implementation and related structural issues, he said. Jaitley said the GOM would be assisted by a committee of experts from the Central and state governments and the National Institute of Public Finance and Planning (NIPFP), who would study and share the findings with the GoM. The GoM in turn would give its recommendation to the GST Council, he said. The members of the GoM and the committee of experts would be announced in due course of time.