In its 23rd meeting in Guwahati, the GST Council pruned out 178 items from 28 percent GST slab. This comes as a major relief for the commoners and leaves only 50 items in the highest slab.
The relief is not only for commoners but the business fraternity too.
In a biggest GST overhaul, the GST council has slashed 178 items out of 228 from the highest slab of 28 percent to 18 percent. Also the council has reduced the tax rate on eating out in all the restaurants except five star hotels. Apart from slashing down the rates, the council has also increased the limit in composition schemes from 1 crore to 1.5 crore. This GST bonanza comes as a major relief and is the major overhaul since the GST roll-out.
With the major overhaul, only 50 luxury items are left under 28 percent tax slab. The commoners are to be benefitted the most as now almost all the basic necessity items are now out of the highest tax slab.
While addressing the press conference after the GST council meeting Finance Minister Arun Jaitley said, “GST council has been reviewing rates from time to time. Since the GST roll out there has been increase in revenue every month. We have been rationalizing the 28 percent bracket from time to time. Now, 28 percent GST will be levied on only 50 items. GST on wet grinders, armored vehicles reduced from 28 percent to 12 percent. 13 items moved from 18 percent to 12 percent, six items from 18 to 5 percent, eight items from 12 to 5 percent and six items from 5 percent to nil.”
He further said, “Fitment committee also gave suggestions and taking those suggestions cess items, which include luxury items, sin goods, white goods and other goods like auto parts, aircraft, construction, cement and paints have retained in 28 percent.” Adding to it he said that the new prices will be implemented from 15th November as central and state governments have to issue notifications.
While revising the tax slab for the restaurants he said that after long observation it was noticed that the restaurants didn’t pass the input tax credit to the customers and hence the restaurant industry will not get the benefits of the input tax credit. Now, 5 percent GST will be levied on restaurants without input tax credit. Restaurants inside the starred hotels will continue with old provision. He said, “The only exception to the 5% tax rate would be restaurants in starred hotels that have room tariff of over Rs 7,500 per night. They would be taxed at 18%, like earlier. Outdoor catering will also be taxed at the old rate of 18%.”
With this biggest overhaul, around 211 items will become cheaper. Apart from appeasing the commoners, the GST council brings a big relief to the business fraternity too. The limit of composition scheme has been increased from 1 crore to 1.5 crore which comes as a big relief for the business community. The GST council has also decided the tax rate for traders & manufacturing under composition will be 1%. No inter-state taxes & input tax credit for composition dealers will be levied.
Hasmukh Adhia, Finance and Revenue Secretary said, “Filing of return for 3B will be continued till March. All tax payers will continue to file 3B till March 2018. If there is a nil return to be filed then late filing penalty will be reduced to Rs 20. For others it has been reduced to Rs 50. This rationalization of GST would put an additional burden of Rs. 20,000 crore.
Main items on which rates have been slashed down:
Wash basin, Ceiling fan, cement bricks, toiletries, bathroom fittings, marbles, wall putty, granite, plywood, tiles, paint, varnish, deodrants, shampoo, hair cream, skin cream, moisturizing cream, shaving cream, skin cream, after shave, perfumes, chewing gums, custard powder, vacuum cleaner, suitcase, camera, talcum powder, sunglasses, leather products, watches, instant coffee, soaps, face cream, face wash, etc from 18 percent to 28 percent, Sweets like Khaja, Anarsa, Chikki, etc. from 18 to 5 percent Pasta, cotton and jute handbag from 18 percent to 12 percent.