GST:- (GST Council Cuts Slabs 178 Items 28%-18%)
In GST, tax rates on around 200 items, was cut down to give relief to customers and businesses. (GST Council Cuts Slabs 178 Items 28%-18%)
Around 178 items of daily use were shifted from the tax bracket of 28% to 18%, while a uniform 5% tax was prescribed for all restaurants, both air-conditioned and non-AC.
Currently, 12% GST on food bill is applied in non-AC restaurants and 18% in air-conditioned restaurants.
Jaitley said that the restaurants, did not pass on the input tax credit (ITC) and so the ITC facility is being withdrawn and a uniform 5% tax is applied on all restaurants without the differentiation of AC or non-AC.
Restaurants in starred-hotels that charge around Rs 7,500 or more per day tariff will be now under 18% GST but ITC is allowed for them. Those restaurants in hotels charging less than Rs 7,500 tariff will charge 5% GST but will not get ITC.
The all-powerful GST Council filtered the list of items in the top 28% Goods and Services Tax (GST) slab to just 50 from 228. Now only luxury and goods are in the highest tax bracket and items of daily use are shifted to 18%.
Also, the tax on wet grinders and armored vehicles was cut from 28% to 12%, he said, adding the tax rate on six items was reduced from 18% to 5%, on 8 items from 12% to 5% and on six items from 5% to nil.
ITEMS CUT DOWN FROM 28% to 18%:- (GST Council Cuts Slabs 178 Items 28%-18%)
These are the listed items that have been cut down from the list of 28% to 18% GST:-
- Chewing gum,
- Custard powder,
- Marble and granite,
- Dental hygiene products,
- Polishes and creams,
- Sanitary ware,
- Leather clothing,
- Artificial fur and wigs,
- Cookers and stoves,
- After-shave deodorant,
- Detergent and washing powder,
- Razors and blades,
- Water heater,
- Wristwatches, and
28% Slab:- (GST Council Cuts Slabs 178 Items 28%-18%)
The top tax slab is now restricted to luxury and goods like:-
- Pan masala,
- Aerated water and beverages,
- Cigars and cigarettes,
- Tobacco products,
- Cement and paints,
- Dishwashing machine,
- Washing machine,
- Vacuum cleaners,
- Cars and two-wheelers,
- Aircraft and yacht.
The cut in tax will cost Rs 20,000 crore in the revenues annually, Bihar Deputy Chief Minister Sushil Kumar Modi said.
ABOUT GST:- (GST Council Cuts Slabs 178 Items 28%-18%)
Launched on July 1st, the GST weaved 29 states into a single market with the single tax rate, while traders and small business complained of the increased compliance burden.
With the growing economy at its slowest pace since Narendra Modi government came into power, the “panic-stricken government has no option but to concede the demands for change” in the tax, former Finance Minister P Chidambaram, said on Twitter. The Council also relaxed the return filing criteria and lowered the penalties for late filing.
“As part of all the efforts to rationalize GST structure, the Council has been reviewing the rates from time to time. In the last 3 meetings, there has been a systematically look out at 28% tax bracket and rationalizing certain items out of that bracket into lower categories, mostly 18% or even less,” Jaitley said.
“Optically, some items should not have been in 28% despite being in the old regime. Secondly, some items manufactured by small entities had excise exemption,” he said, adding in the last meetings 30-40 items have been taken out of 28% bracket.
SPEECHES:- (GST Council Cuts Slabs 178 Items 28%-18%)
- Bipin Sapra, Tax Partner, said that “While the reduction of rates would lower the prices of a number of commodities. However, the government might need to balance the revenue considerations too.”
- Krishan Arora said that “the decision of the GST Council on filtering out the 28% slab list is a welcoming move for many industries in mass consumption.”
In certain cases, it is likely to bring down the total tax impact even lower than the earlier regime. This would be a big relief to the industry as well as the consumers.
- “Rationalization exercise of the tax slabs needs to be carried out comprehensively keeping in mind the significance of the industry and the tax incidence under an earlier regime,” Arora said.
- Vishal Raheja of Taxmann described it as “great step”. He said that “In future, we may expect that Government will further slash tax rates by moving from 4-tier tax slabs to lesser slabs or even single GST rate”.
- Abhishek A Rastogi of Khaitan & Co said: “while it was expected that there will be rate cuts, it was never expected that the list will be filtered down so significantly.”
- “With the rate reduction of products, the next step of the government should be to ensure that the benefit of the rate reduction goes to the consumers,” he said.
- “It appears that after this massive rate reduction various anti-profiteering problems might kickoff for businesses which would not pass on the benefit to the customers.”