GST rate cut: From diamonds to used cars, here's full list of revised items
Two weeks ahead of Budget 2018, the Goods and Services Tax (GST) Council on Thursday cut rates on 83 employment-oriented goods and services, in a bid to encourage greater compliance as revenues have dipped since the landmark reform was announced in July. The panel, headed by Finance Minister Arun Jaitley and comprising representatives of all states, at its 25th meeting decided to reduce tax rate on 29 items and 54 categories of services with effect from January 25. Businesses have raised concerns about high rates of taxation and cumbersome processes in GST, billed as India's biggest tax reform in 70 years.
The goods on which GST will be lowered include biofuel-run buses, used motor vehicles and diamonds and precious stones. Here's the complete list: List of goods on which GST rate recommended for reduction from 28% to 18% Old and used motor vehicles on the margin of the supplier, subject to the condition that no input tax credit of central excise duty/value added tax or GST paid on such vehicles has been availed by him. Buses, for use in public transport, which exclusively run on bio-fuels. List of goods on which GST rate recommended for reduction from 18% to 12% Sugar boiled confectionary Drinking water packed in 20 litters bottles Fertilizer grade Phosphoric acid Bio-diesel Bio-pesticides Bamboo wood building joinery Drip irrigation system including laterals, sprinklers Mechanical Sprayer List of goods on which GST rate recommended for reduction from 18% to 5% Tamarind Kernel Powder Mehendi paste in cones LPG supplied for supply to household domestic consumers List of goods on which GST rate recommended for reduction from 12% to 5% Articles of straw, of esparto or of other plaiting materials; basketware and wickerwork. List of goods on which GST rate recommended for reduction from 3% to 0.25%. Diamonds and precious stonesList of goods on which GST will not be charged.Vibhuti Parts and accessories for manufacture of hearing aids De-oiled rice bran GST rate cut on services.In the services segment, government will cut taxes on transportation of crude, gasoil, gasoline, jet fuel and services relating to mining, exploration and drilling of oil and natural gas, among other things.Admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet will now be taxed at 18% instead of 28% and on common effluent treatment plans services from 18% to 12%. List of goods on which GST rate recommended for increase from nil to 5% Rice bran (other than de-oiled rice bran) Cigarette filter rods Loss to the exchequer GST rate cut will hit the exchequer by Rs 10-12 billion annually.Reason for rate cut. The Council veered around the idea of making the GST return filing process simpler to ease compliance burden for small businesses.GST Panel also decided to divide Rs 350 billion (Rs 35,000 crore) IGST collections between centre and states.Petrol, crude oil may come under GST ambit Finance Minister Arun Jaitley
said the next meeting of the Council may consider bringing items like crude oil, natural gas, petrol, diesel, ATF and real estate within the GST purview. ALSO READ: Consumer helpline data indicates traders are charging GST over MRP While GST collections have been coming down and reached a low of Rs 800 billion in November, direct tax collections have given the government muchneeded help. Direct tax collections grew 18.7 per cent till January 15, against the Budget target of 15.7 per cent for 2017-18. These would be reflected in the Revised Estimates of 2017-18 in the Budget. To ease the flow of funds for both the Centre and states, the Council also decided to distribute Integrated GST (IGST) of Rs 350 billion equally between them.
ARTICLE SOURCE- BUSINESS STANDARD.