GST Council cuts rates on 23 items

GST Council cuts rates on 23 items

In the meeting held in July, the GST council had further pruned the 28 per cent slab, as it cut rates on paints and varnishes, and on daily-use items like perfumes, cosmetics, toiletries, hair dryers, shavers, mixer grinder, vacuum cleaners, lithium-ion batteries, and cut rates to 18 per cent. Jaitley, in a blog post, had said the 28% category is being phased out and the bracket now covers the most luxurious items, the ones you don't require daily. Besides, seven items have been moved from the 28 per cent slab to 18 per cent.

- Finance minister Arun Jaitley said that today's GST rate reduction will have an overall impact on revenue of Rs 5500 crore.

To resolve the dispute the Council has recommended that in all such cases, the 70% of the gross value shall be deemed as the value of supply of said goods attracting 5% rate and the remaining portion (30%) of the aggregate value of such EPC contract shall be deemed as the value of supply of taxable service attracting standard GST rate.

The meeting, chaired by Union Minister Arun Jaitley, moved six items from the 28% tax bracket to 18%, PTI reported.

GST council in its next meeting would take a view on the above issues in its next meeting. The new rates will come into effect from January 1.

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"At a time when stronger demand can speed up growth, the reduction in tax rates for items used by different sections of society can be expected to impart a necessary boost to the economy", CII Director General Chandrajit Banerjee said. When the original rates were fixed, India had the most irrational taxation rates. "If they are brought down from 28% to 18%, implications are of Rs 33,000 crore".

GST rate on cinema tickets above Rs. 100 shall be reduced from 28% to 18% and on cinema tickets upto Rs. 100 from 18% to 12%. The rate rationalisation comes after Prime Minister Narendra Modi on Tuesday indicated that the 28 per cent slab of GST would only be restricted to a few select items, such as luxury and sin goods and said his government wants to ensure that '99 per cent items attract 18 per cent or lower GST. It was a Christmas bonanza to the common man as well. Tyres, Power banks of Lithium-ion batteries have brought down from 28% to 18% slab.

"There is a consensus that something needs to be done on this", he added. "GST council and all the representatives of the country and the state will decide in the interest of the country rising above politics", he added.

The 31st GST Council meeting also approved a proposal to form a 7-Member Group of Ministers (GoM) to study the revenue trend, including analysing the reasons for structural patterns affecting the revenue collection in some of the states. The government will also start New return filing system on trial from April 1.

The GST Council has also made a decision to set up a centralised Authority for Advance Ruling to hear those cases in which two divergent verdicts have been passed by AARs of two different states.