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The highest tax bracket of 28% has been streamlined with rates on everyday items such as perfumes, cosmetics, toiletries, hair dryers, razors, blenders, vacuum cleaners
New Delhi: The GST Council lowered tax rates on 88 items, including shoes, a refrigerator, a washing machine and a television set. small screen, while the widely requested sanitary napkins were exempted from the tax.
The highest rate of taxation The rate of 28% has been rationalized further with rates on everyday items such as perfumes, cosmetics, toiletries, hairdryers, razors, mixers, vacuum cleaners, lithium-ion batteries, lowered to 18%. The revised tax rates will come into effect on July 27.
"Each state wanted the rates on these products to be lowered for middle-income households to benefit … It was also decided that the GST Council would exceed revenues and focus more on the creation of Jobs and economic growth, "Finance Minister Piyush Goyal said.
The refrigerator, washing machine, small screen TV, water heaters, paints and varnishes will now attract 18% of GST against 28% currently.
The ethanol tax rate was reduced from 18% to 5% present. Shoes costing up to $ 1,000 will now attract 5% GST. Up to now, shoes of less than ₹ 500 have attracted 5% GST and those whose retail price has exceeded ₹ 500 have attracted a rate of 18%.
Sanitary napkins, which are taxed at 12%, and enriched milk, taxed at 18%, were exempted from the new indirect tax.
Also stone idols, marble, wood, rakhi not encrusted with stone, phool jhadu, sal leaves, were exempted.
"The GST Council today approved the reduction of the rates of 88 goods and services.The money in the hands of all sectors of society – the poor, the households, the women Farmers and the elderly, "Goyal tweeted late at night, and earlier at the press conference the minister said tariffs were rationalized for 100 items.
At its first meeting of the Council From GST since he took office as Finance Minister last May, Goyal has also allowed businesses with a turnover of ₹ 5 crore to file quarterly returns. However, they will still have to pay taxes on a monthly basis, and companies with a turnover of ₹ 1.5 crore were now allowed to file quarterly returns. (Saturday) ap a number of decisions unanimously. Simplification and streamlining have been given the highest priority, "said Goyal at a briefing for journalists after the 28th Council meeting.
Asked about the impact of lower tax rates on revenue, Goyal said it would only be "nominal". "With the simplification, there will be some compliance buoyancy and l & # 39; Overall badessment will show that the impact on incomes is marginal, "he said, adding that the shortfall is for the sake of consumers.
The sources, however, said that the reduction in tax rate is likely to cost around ₹ 8,000-10,000 crores a year on the chessboard.
In the service sector, the hotel industry also received a significant relief since the GST on the hosting service will now be based on transactional value e rather than the declared value. GST at the rate of 28% is charged if the rent of the hotel room exceeds ¥ 7,500. Between 2 2,500 and 7 7,500, the GST is 18%, and the de 1,000 and less than 2 2,500 is 12%.
In addition, the tax rate on the supply of ebooks has been reduced to 5% from 18%.
Union Minister Arun Jaitley said reducing rates would go a long way to boosting productivity. "This is a major step toward streamlining the 28% tax slab, which has been reduced to just a few products in the last 13 months," tweeted Jaitley. The Board has also decided to postpone the implementation of the reverse charge mechanism (RCM) until 30 September 2019. The RCM, which was already pending until September 2018, is considered a tool for combating tax evasion.
The Council also authorized more than 40 amendments, including increasing the threshold for a membership scheme to ₹ 1.5 crore and allowing multiple registration for businesses, to the law on GST. The next Council meeting will be held on August 4, which will address issues related to the MSME sector as well as ways to encourage digital transactions via Rupay cards and the BHIM app.
A committee led by Deputy Minister of Bihar, Sushil Modi, will look at ways to promote digital payments using these modes. In addition, a chance will be given until August 31 for companies to migrate to the GST system and late fees will be removed, added Mr. Goyal.
Abhishek Jain, EY partner, said: "The reduction of the GST rate on ethanol to be used by oil companies is welcome since the major petroleum products are off-GST, which should help reduce their costs. " This is the fourth time since the launch of the GST that the Board, chaired by the union's finance minister and including state counterparts, has streamlined rates.
At its meeting in November of last year, the board had cut rates in over 178 articles in the 28% tax bracket.
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