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.