GST meet: Tax on 80% items of top rate slab likely to be slashed
NEW DELHI :The two-day Goods & Services Tax (GST) Council meeting will begin Thursday in Guwahati.
Expectations are rife that the government will cut rates on over 180 items. Even Finance Minister Arun Jaitley on Tuesday hinted at pruning the list of items in the highest GST tax bracket of 28 percent after revenue in the new regime equalize
collections previously.
He said that some of the items should never have been in the 28 percent slab and the GST Council in the last 3-4 meetings has slashed rates on over 100 items, thereby bringing them down either from 28 percent to 18 percent or from 18 percent to 12 percent. Under GST regime implemented from July 1, 2017, over 1,200 products and services have been fitted into one of the 5, 12, 18 and 28 percent tax slabs based on the principle of keeping the total tax incidence at almost the same level as previously as well as keeping revenue collections neutral.
As per reports, officers from finance departments of various states will convene on November 9 while Finance Minister Arun Jaitley will head the meeting on November 10.The GST Council, which comprises of representatives of all states, have already rationalised tax rates for over 100 items. The Council has last month approved an approach paper to be followed by the fitment committee while deciding on future rate revisions.
In further relief to small and medium enterprises (SMEs), GST Council is likely to rationalise tax rate in sectors where the total incidence of taxation has gone up because the goods were earlier either exempt from excise or attracted lower VAT rates in the previous indirect tax regime. The GST Council has been meeting every month since the GST rollout on 1 July. The meetings have resulted in an array of changes to ease compliance burden on businesses as well as provided relief to consumers.
Under GST, various goods and services have been bracketed in 5%, 12%, 18% and 28%. GST has subsumed over a dozen taxes, including excise, service tax and VAT, and transformed India into a single market.
On Wednesday, Bihar Deputy Chief Minister Sushil Kumar Modi, who is also a member of the GST council, said that tax rates on 80 per cent items of top 28 per cent slab are likely to be slashed at the council’s meeting. “Tax rate 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, adding that so far, tax rates have been slashed on more than 100 items.
