The Goods and Services Tax (GST) Council has lowered the GST rates of 66 products, including insulin, school bags and tractor parts from the earlier proposed GST rates.
The 16th GST Council, headed by Finance Minister Arun Jaitley, and comprising representatives of all states, decided on Sunday to cut the rates of these items after consulting industries.
"After considering the recommendations, the GST Council has reduced the tax level in 66 out of 133 items on which representations were made by industries," Jaitley said at a press conference after the meeting on Sunday.
The Council has reduced rates of the main products used by the common man. The rate for insulin has been proposed to be reduced to 5 per cent from 12 per cent, whereas the rate on school bags has been cut to 18 per cent. The rate on notebooks has been cut to 12 per cent from 18 per cent. Also, the rate for tractor parts has been cut to 18 per cent from 28 per cent.
Movie tickets that cost Rs 100 and below will now attract 18 per cent GST, as against 28 per cent proposed earlier. Tickets costing more than Rs 100 will continue to attract 28 per cent GST.
Pickles and mustard will attract 12 per cent GST against the earlier proposed 18 per cent. Also, the rate on cashew nuts have come down to 5 per cent from 12 per cent.
The Council has also decided to provide some relief to small and medium enterprises on GST compliance as it decided to raise the threshold of the composition scheme from Rs 50 lakh to Rs 75 lakh.
"There were two objectives. One, to maintain revenue neutrality to the extent possible but ease the burden on SMEs, and also reduce the burden on these three categories which are mass job creators," said Jaitley.
"This should mean that a significant number of SME players should benefit from not having to meet with detailed compliances under GST and also have a less financial burden, on account of GST," said Mahesh Jaising, partner, indirect tax, BMR & Associates LLP.
The GST Council will meet on June 18 again to tie up the loose ends, including deciding the tax rate on the lottery and approve the proposed e-way bill. E-way bills is a major concern for the industry to be prepared as on July 1 if the same were to be made fully applicable on the start date.
But former CBEC chairman, Sumit Dutt Majumder, said, "A few decisions kept pending till June 18 makes me wonder whether the target will now be September 1, and that would be good for all stakeholders, including GSTN."
"E-way bill discussions are deferred to the June 18 meeting, hope they defer this by six months and water down the provisions to avoid challenges. Anti-profiteering rules are now likely to be out post-July 1, which could be a challenge from a clarity perspective. With potentially two more Council meetings we will be down to the wire for July 1 implementation" said Harishanker Subramaniam, national leader, indirect tax, EY India.
The Council needs to now accept the additional time needed by the industry to prepare, as many are yet to gear-up from a systems standpoint i.e. invoicing, maintaining GST registers and filing returns on 40th day from July 1," said Suresh Nandlal Rohira, partner, Grant Thornton India LLP.
...& ANALYSIS
- With an increase in tax rate, tech hardware companies are expected to take a hit.
- It will be now crucial for companies to keep a tab on what is happening at the ground level and keep their communication open.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "GST Council")
)
Movie tickets that cost Rs 100 and below will now attract 18 per cent GST, as against 28 per cent proposed earlier. Tickets costing more than Rs 100 will continue to attract 28 per cent GST.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}