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
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