Skip to main content

200 items cheaper as GST cuts notified

200 items cheaper as GST cuts notified
Eating out and a  little over 200 products of mass consumption, including detergents and ceiling fans, became cheaper from Wednesday with the lower goods and services tax (GST) rates taking effect.
The finance ministry has told citizens to remember this while purchasing these.The government formally notified the lower rates, including on chocolates, waffles, furniture, wristwatches, cutlery, suitcases, ceramic tiles and articles of cement.
The GST Council, chaired by Finance Minister Arun Jaitley, had on Friday in Guwahati decided to cut rates on these items to provide relief to consumers and businesses, amid an economic slowdown.
The Council pruned the list of items in the top 28 per cent GST slab to 50, from the earlier 228. Another 176 had the rate cut from 28 per cent to 18 per cent —chewing gum, chocolates, coffee, custard powder, marble and granite, dental hygiene products, polishes and creams, sanitary ware, leather clothing, artificial fur, wigs, cookers, stoves, after shave deodorant, detergent and washing power, razors and blades, cutlery, water heaters, batteries, goggles, wristwatches and mattresses, among others.
The tax on wet tanks and armoured reduced to 12 per cent from the peak rate.And,auniform five per cent tax prescribed for all restaurants, both airconditioned and not.Broadly, in the highest tax slab are what are termed luxury goods and ´sin´ goods —pan masala, aerated water, beverages, cigars and cigarettes, tobacco products, cement, paints, perfumes, air conditioners, dish washing machines, cleaners, two wheelers, aircraft and six items were 18 per cent to on eight items per cent, and on to nil.milk, refined diabetic food, medical grade oxygen, printing ink, handbags, hats, spectacle frames and bamboo/ cane furniture has been cut from 18 per cent to 12 per cent.
No more GST on advances for goods
The government on Wednesday did away with the goods and services tax (GST) on advances paid against future supply of goods for all businesses -a move aimed at easing the working capital for companies.Companies were reportedly facing working capital loss on account of the condition to pay the GST on advance received.
Earlier, the government had exempted businesses up to Rs 1.5 crore annual turnover from paying the GST on receipt of advance.It has decided to extend it to all, barring those part of the composition scheme that allows easier compliance and a flat tax rate for small businesses.
“It is a very significant relief, which businesses were looking forward to. Under the VAT (value added tax) regime, there was no tax on advances for goods, but it was introduced under the GST regime.
Since input credit was only available after receipt of goods, this led to working capital blockage,” said Pratik Jain of consultants PwC India.For services, the GST continues to be payable on advances, in line with the provisions under the erstwhile service tax laws, he said.
Abhishek Jain, tax partner at EY India, said: ”This comes as huge relief for businesses, both in terms of compliances and working capital loss.”
The Business Standard, New Delhi, 16th November 2016

Comments

Popular posts from this blog

RBI minutes show MPC members flagged upside risks to inflation

RBI minutes show MPC members flagged upside risks to inflation Concerns about economic growth and easing inflation prompted five of the six monetary policy committee (MPC) members to call for a cut in the repo rate, but most warned that prices could start accelerating, show the minutes of the panel’s last meeting, released on Wednesday. The comments reflected a tone of caution and flagged upside risks to inflation from farm loan waivers, rise in food prices, especially vegetables, price revisions withheld ahead of the goods and services tax, implementation of house rent allowance under the 7th pay commission and fading of favourable base effect, among others. On 2 August, the panel chose to cut the repurchase rate—the rate at which the central bank infuses liquidity in the banking system—by 25 basis points to 6%. One basis point is one-hundredth of a percentage point. Pami Dua, professor at the Delhi School of Economics, wrote that her analysis showed “a fading economic growth outlook, as …

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

Differential Tax Levy under GST: Food Firms May De-Register Trademarks

Differential Tax Levy under GST:Food Firms May De-Register Trademarks The government’s decision to charge an enhanced tax rate on trademark food brands is leading several rice, wheat and cereal manufacturers to consider de-registering their product trademarks. Irked by the June 28 central government notification fixing a 5 per cent goods and services tax (GST) rate on food items packaged in unit containers and bearing registered brand names, the industry has made several representations to the government to reconsider the differential tax levy, which these players say is creating an unlevel playing field within these highly-competitive and low-margin industries. Sources say that the move has affected the packaged rice industry the hardest and allowed the un-registered market leaders, India Gate and Daawat, to gain advantage as compared to other registered brands such as Kohinoor and Lal Qilla. Smaller players are even more worried with this enhanced rate of tax (against the otherwise …