GST rates on over 70% items in the 28% bracket to come down
09 Nov 2017
The GST Council is likely to slash tax on more than 70 per cent of the 227 items in the 28 per cent rate slab to the 18 per cent or less at its meeting starting today. This will leave only 62 items in the top GST rate slab of 28 per cent, Sushil Modi, convenor of the GST ministerial forum, said.
Like demonetisation, GST too aims at "achieving a clean, transparent and honest economy," Modi said even as he claimed "the common people have no problems with the new tax regime per se."
"The new generation of traders is rapidly moving towards digitization. They want to change the way business is done and are not willing to continue with the kachcha bill system", the Bihar Deputy CM added
"Tax rates on 80 per cent of 227 items falling in top slab is likely to be reduced from 28 per cent to 18 per cent in the next GST council meeting. The GST fitment committee has also recommended reducing tax rates from 18 per cent to 12 per cent on a number of goods", Sushil Modi said at a function organised by the Bihar Chamber of Commerce.
As many as 165 items such as new furniture or refit electric switches might have to pay 18 per cent or less beginning Friday, as the GST Council is likely to slash tax rates on these items at its meeting in Guwahati.
Some common use items might also have their rates slashed from 18 per cent to 12 per cent, as demanded by states like West Bengal.
Those remaining in the highest tax bracket could include digital cameras, shaving creams, paints and varnishes, cigars, pan masala, chocolates, cosmetics, vacuum cleaners, refrigerators, washing machines, hair conditioning items, hair dyes, and marble and granite.
If these suggestions of the ''rate-fitment committee'' are accepted, it would be the biggest rejig of rates since the GST roll-out on 1 July this year. Many common goods, which make up 75 per cent of the highest GST slab, will become cheaper.
If accepted by all members of the council, this will be a big relief for consumers and industry.
Of the more than 1,200 products and services fitted into one of the four tax slabs - 5, 12, 18, and 28 per cent - before the roll-out, only 62 are now in the 28 per cent slab while 1,138 are in the 18 per cent and below tax slabs.
At Friday's meeting, the GST Council will also discuss the inclusion of real estate in the new indirect tax regime. It would also discuss ways of reducing the compliance burden on taxpayers.
Finance minister Arun Jaitley had said at an event on Tuesday that some of the items should never have been in the 28 per cent slab, a demand opposition Congress had made before GST legislation.
The GST Council in the last three or four meetings has reduced rates on over 100 items, bringing them down either from 28 per cent to 18 per cent or from 18 per cent to 12 per cent.
Jaitley had said at Harvard University last month that bringing real estate under the GST will be taken up in the Council at its Guwahati meeting. ''The one sector in India where maximum amount of tax evasion and cash generation takes place and which is still outside the GST is real estate. Some of the states have been pressing for it. I believe that there is a strong case to bring real estate into the GST,'' he had said. ''Some states want; some do not. There are two views. Therefore, by discussion, we would try to reach one view,'' Jaitley had said in the US.
The Indian Stamp Duty Act, 1899, empowers states to collect and impose stamp duty. These vary across states, currently in the range of 3-10 per cent.
''The discussion on real estate will be at a very conceptual stage. Pros and cons will be discussed. After all, states will need to surrender their power to tax, even though revenue may not be a big concern,'' said another government official.
