23rd GST Council Meeting Updates: Tax Rate Cut On Over 170 Items
The 23rd meeting of the GST Council is being held in Guwahati today.
The GST Council at its 23rd meeting today decided to cut the 28 per cent GST tax rate on a wide range of mass consumption items to 18 per cent, Bihar Deputy Chief Minister Sushil Kumar Modi said. He is attending the 23rd meeting of GST Council today in Guwahati. The GST Council decided to keep the list of items attracting the top 28 per cent tax rate to just 50, from 227 previously, Mr Modi told reporters on the sidelines of the GST Council meeting. This means that the GST Council has effectively cut tax rate on 177 goods.
He said all types of chewing gum, chocolates, preparation for facial make-up, shaving and after-shave items, shampoo, deodorants, washing powder detergent and granite and marble will attract lower 18 per cent tax rate.
“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,” Mr Modi said.
“Paints and cement have been retained in the 28 per cent tax bracket, he said. “Luxury goods like washing machines and air conditioners have been retained at 28 per cent.”
“We’ve limited the number of items in the 28 percent tax list to 50 items,” said Mr Modi, adding the move could cost the exchequer around Rs. 20,000 crore this fiscal year.
At its 23rd meeting today, the GST Council could also decide on lowering of tax rates food served in restaurants. The GST Council is also expected to offer more relief to small and medium enterprises (SMEs) in terms of compliance burden.
A panel, headed by Assam Finance Minister Himanta Biswa Sarma, has suggested doing away with the tax rate distinction between AC and non-AC restaurants not covered under composition scheme. It has proposed a uniform tax rate of 12 per cent. Currently, GST is levied at 12 per cent on non-AC restaurants, while it is 18 per cent for air-conditioned ones.
The panel headed by Assam Finance Minister had also suggested that eating out at hotels that have room tariff of more than Rs. 7,500 should attract a uniform 18 per cent rate instead of any separate category for 5-star hotel, which currently falls under the 28 per cent bracket.
The panel also recommended lowering tax rates for manufacturers and restaurants under the composition scheme to 1 per cent. At present, while manufacturers pay GST at 2 per cent, the rate for restaurants is 5 per cent. Traders currently pay 1 per cent.
Businesses with annual turnover up to Rs. 1 crore can opt for the composition scheme, which enables them to pay tax at a flat rate without input credits. The objective of the optional composition scheme is to bring simplicity and reduce the compliance cost for the small businesses.
To ease compliance burden for small businesses, the GST Council is also going to review the requirement of filing three returns every month under the GST set-up.
The GST Council has been meeting every month since the new indirect tax regime was introduced on July 1, 2017. The GST Council, which comprises of representatives of all states, has already rationalised tax rates for over 100 items. Under GST, various goods and services have been placed in the brackets of 5, 12, 18 and 28 per cent.
Meanwhile, the GST Network today said businesses can now make changes to the forms uploaded on the portal to claim transition credit. “The facility to revise Form GST TRAN-1 declaration has been introduced on the GST Portal for taxpayers who had already filed it prior to November 9, 2017,” GSTN said in a statement.
Source by ndtv..