GST Council trims items in the top 28% tax slab to 50

10 Nov 2017


The GST Council at its 23rd meeting today decided to prune the list of items attracting the top 28 per cent tax rate to just 50, from 227 previously, making 177 items cheaper in the process.

A wide range of daily-use items, ranging from chewing gums to detergents, will now attract GST rate of 18 per cent, leaving mostly demerit, sin and luxury goods in top 28 per cent bracket, Bihar deputy chief minister and convener of the GST ministerial forum, Sushil Kumar Modi, said.

"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," Sushil Modi told reporters on the sidelines of the ongoing Council meeting.

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 was unanimity that in 28 per cent category there should be only sin and demerit goods. So, today the GST Council took a historic decision, that in the 28 percent slab there will be only 50 items and the remaining items have been brought down to 18 percent," he 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."

But mass consumption items have been lowered to 18 per cent, Modi said.

Eating out has become cheaper. For restaurants and hotels, the Council has fixed rate for restaurant at flat 5 per cent who don't claim tax credit (including ac/non ac), while outdoor catering will be taxed at 18 per cent. Rate for hotels with Rs7,500 room rent has been fixed at 18 per cent.

Tax rate on fire extinguisher, watches, blade, stove and mattress has been reduced to 18 per cent from 28 per cent.

GST rate on fly ash and fly ash brick reduced to 5 per cent from 18 per cent. Rate on pasta, jute and cotton hand bags cut to 12 per cent from 18 per cent.

The decision taken by GST Council will have a revenue implication of Rs 20,000 crore, Modi added. "There is a consensus that slowly, the 28 per cent slab should be brought to 18 per cent. But it will take some time because it has a big revenue implication," he said.

Meanwhile, according to reports Council has increased the threshold for composition scheme to Rs 1.5 crore, said Amit Mitra, Finance Minister of West Bengal.

He also revealed that the aggregate loss of revenue from implementation of GST was around Rs 60,000 crore for Centre and Rs 30,000 crore for states in last 3 months

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