After Prime Minister Narendra Modi announced the government’s aim to bring 99 percent of all items below the 18 percent GST slab, today 31st GST council meeting was chaired by Finance Minister Arun Jaitley with finance ministers from states in the National Capital. Its aim was to rationalize and announce tax cuts for goods of everyday consumption and bring them under 18% slab.
Financial Minster after the meeting announced that only 28 items of luxury remain under the slab of 28%, and all other products of common needs have been moved under the 18% slab. Products like monitors, tyres, power banks, lithium-ion batteries have been brought to 18% slab and accessories related to specially-abled people to 5%.
Products like components of automobiles, cement, air conditioners, and dishwashers will continue under the existing slab of 28%. Although GST reduction of cement was highly anticipated, the Finance Minister said that the reduction in tax on cement and the automobile parts will have fiscal implications as the total revenues from these products is around Rs 33,000 crores.
GST on real estate will be discussed in next council meeting along with taxation on lottery. Arun Jaitley said that Law Fitment Committee will take a view on real estate in the next meeting.
FM: There are 28 items left in the 28% bracket if we include luxury & sin items. 13 items are from automobile parts & 1 is cement. Cement’s revenue is 13000 crore & automobile parts revenue is 20000 crore. If they are brought down from 28% to 18% implications are of 33000 crore https://t.co/EWaUBOd5tp
— ANI (@ANI) December 22, 2018
The Council has also advised for the reduction of GST on Solar power generating plants. The tax rate on movie tickets above Rs 100 was brought under 18% slab. GST on third-party insurance premiums has also been slashed to 12% from 18%.
Vegetables (cooked or uncooked), and frozen vegetables have been shifted to zero percent slab from previous 5%. Bank’s services to Jan Dhan bank account holders will also not invite any tax rate slab.
Finance Minister Arun Jaitley: Today’s GST rate reduction will have an overall impact on revenue of Rs 5500 crore. pic.twitter.com/w3sv5UOiat
— ANI (@ANI) December 22, 2018
”Today’s GST rate reduction will have an overall impact on revenue of Rs 5.500 crore” FM Jaitley has asserted.
These announcements are the biggest changes ahead of the upcoming Lok Sabha elections. Sparing a few luxury items, a majority of the products have been transferred under a slab of 18%. These tax cuts will come into effect from January 1, 2019.
