Wednesday, December 8, 2021
HomeNews ReportsGST Council slashes rates on 66 items – know what will get cheaper

GST Council slashes rates on 66 items – know what will get cheaper

In a huge relief for the consumers and small businesses, the GST Council has slashed rates for as many as 66 of the 133 items on which representations had been received.

The decision was taken at the 16th meeting of the GST Council – chaired by Union finance minister Arun Jaitley and attended by state finance ministers – held on Sunday with barely two weeks to go for the goods and services tax (GST) roll-out.

“The 133 representations received were considered at length and the officers’ committee made their recommendations… the council has reduced tax in 66 out of the 133 cases,” Finance Minister Arun Jaitley told reporters.

“The objective (of earlier rates) was to maintain equivalence to the existing taxes, and in some other cases the fitment had breached this equivalence principle. In others, the reduction is required because of the changing nature of the economy and changes that have occurred in consumer preference,” he said.

The Finance Minister said reducing the tax rate meant a revenue impact for the government, but lower tax incidence could help improve tax buoyancy and keep inflation low.

Kitchen use items like pickles, mustard sauce and morabba will attract 12 per cent GST, as against 18 per cent proposed earlier. Also, tax rates on cashew nuts have been cut to 5 per cent from 12 per cent.

GST on insulin and agarbatti has also been lowered to 5 per cent, while school bags will attract tax of 18 per cent. Sanitary napkins have been classified under the 12% bracket.

The GST Council lowered GST rates on children’s drawing books to nil from 12 per cent. Computer printers will attract 18 per cent tax as against 28 per cent earlier. Tax rate on kajal has been lowered to 18 per cent from 28 per cent.

The council also relaxed the Rs 50 lakh per annum turnover ceiling to Rs 75 lakh for businesses to take part in the GST Composition Scheme.

Movie tickets costing Rs 100 and below will now attract 18 per cent tax, as against 28 per cent proposed earlier, while those above Rs 100 will continue to attract 28 per cent GST.

Based on industry demand, the GST Council also lowered the levy on jobwork for textiles, gems and jewellery, printing and leather from 18 per cent to 5 per cent.

Apart from the changes in rates, the GST Council also decided that traders, manufacturers and restaurant owners with turnover of up to Rs 75 lakh can opt for a composition scheme and pay taxes at the rate of 1, 2, and 5 per cent respectively.

Small traders within the prescribed turnover will be able to opt for the scheme by paying 1 per cent tax while manufacturers are allowed to pay 2 per cent and restaurants 5 per cent. Those opting for the composition scheme do not need to file invoices electronically or complete the three-stage filing process every month.

Over the last three weeks, the GST Council had decided the rates for 1,211 goods and around 500 services. All goods and services have been put into four tax slabs –5, 12, 18 and 28 per cent. Several mass-consumption items will attract zero tax.

The next meeting of the GST Council is scheduled for June 18 when it will take up lottery taxes and e-way bill.

 

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OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

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