Skip to main content

Only 62 items likely to stay in 28 percent GSt slab

By
Only 62 items likely to stay in 28 percent GSt slab
About three-fourth items in the highest tax slab may move to lower brackets
Those planning to buy new furniture or refit electric switches might have to pay less after Friday, as the GST (goods and services tax) Council is likely to slash the indirect tax rates on these items at its meeting in Guwahati.At present, these attract 28 per cent tax. As many as 165 such items could be moved to the 18 per cent category, with only 62 attracting the highest rate.
Those retained in the highest category could include digital cameras, shaving creams, paints and varnishes, cigars, pan masala, chocolates, cosmetics, vacuum cleaners, refrigerators, washing machines, hair conditioning items, hair dyes, and marble and granite.Some common items might also have their rates slashed from 18 per cent to 12 per cent, as demanded by states such as West Bengal.
At the Friday meeting, the Council will also have a presentation about the inclusion of real estate under the new indirect tax regime.Reducing the compliance burden on tax payers would be a part of the exhaustive agenda.If these suggestions of the “rate fitment committee” are accepted, it would be the biggest rejig of rates since the GST rollout on July 1 this year. Many common goods, which make up 75 per cent of the highest GST slab, will become cheaper.
“This will be a big relief for consumers and industry.It is to be seen if all states accept it,” said a government official on condition of anonymity.Over 1,200 products and services were fitted into one of the four tax slabs —5, 12, 18, and 28 per cent —before the rollout.Astate government official said there would be some discussion on trimming of items in the 28 per cent slab. “Some rules need to be formulated on rate reduction.
It can´t be done by the fitment committee alone.There needs to be some basis for that,” said the official.Finance Minister Arun Jaitley had said at an event on Tuesday that some of the items should never have been in the 28 per cent slab.
GST RATE FITMENT
Sanitaryware, Electric Switches, Furniture, Detergent, Washing Machines, Refrigrators, Chocolates, Cosmetics 
The GST Council in the last three or four meetings has reduced rates on over 100 items, bringing them down either from 28 per cent to 18 per cent or from 18 per cent to 12 per cent.Afinance ministry official said initially items that had attracted 12.5 per cent central excise and 14.5 per cent valueadded tax (VAT) were “mechanically” put in the 28 per cent slab.
Real estate: Conceptual discussion
A presentation will be made on the inclusion of real estate in the GST.The approval of states is key as stamp duty and registration fees on property are the exclusive domain of states according to law and will need an amendment in the Indian constitution.
The Indian Stamp Duty Act, 1899, empowers states to collect and impose stamp duty. These vary across states, currently in the range of 310 per cent. “The discussion on real estate will be at a very conceptual stage.Pros and cons will be discussed.After all, states will need to surrender their power to tax, even though revenue may not be a big concern,” said another government official.
Jaitley had said at Harvard University last month that bringing real estate under the GST will be taken up in the Council at its Guwahati meeting.“The one sector in India where maximum amount of tax evasion and cash generation takes place and which is still outside the GST is real estate.
Some of the states have been pressing for it.Ibelieve that there is a strong case to bring real estate into the GST,” he had said. “Some states want; some do not. There are two views.Therefore, by discussion, we would try to reach one view,” Jaitley had said in the US
Breather likely on complaince
The Council might also allow quarterly return filing for all taxpayers, with monthly tax payment.This was suggested in a report prepared by the group of ministers (GoM), led by Assam Finance Minister Himanta Biswa Sarma.In its last meeting, the Council had allowed quarterly return filing and tax payment for those with an annual turnover of up to Rs 1.5 crore.
“Keeping in mind the matching of returns, why not allow quarterly return filing for all taxpayers? If not all, at least for those with annual turnover of Rs 5 crore or Rs 10 crore should be allowed easier compliance through quarterly filing,” said the official.Besides, the composition scheme that allows a flat rate of tax and easier compliance may be eased further.
The Council may increase the threshold for eligibility to Rs1.52crore annual turnover, from Rs 1 crore at the moment.This will require an amendment in the law. “Amendment in the law will be needed, as the Act currently provides foralimit of Rs 1 crore for the composition scheme.We will not do it through an ordinance, but by amendment, which may take about two months,” said another official.
A flat 1 per cent rate for manufacturers and restaurants will be considered, against the current 2 per cent and 5 per cent, respectively.For traders,alower rate of 0.5 per cent in the case of a cumulative turnover of exempted and non-exempted goods and 1 per cent for non-exempted goods may be allowed.
Allowing interstate sale under the composition scheme will also be taken up.Additionally,a reduction in late filing fees to Rs 50 per day, against Rs 200 at present, may also be considered.For traders, the report recommended a lower rate of 0.5 per cent in the case of a cumulative turnover of exempted and non-exempted goods, and 1 per cent for non-exempted goods.
Confederation of All India Traders has also been pitching for a reduction of items in the 28 per cent tax slab. Inaletter to the finance minister, it has said that items related to construction and infrastructure such as cement, builders hardware, plywood, electrical fittings, marbles, beauty cosmetics, nutraceuticals, vitamin, mineral and protein should be kept out of 28 per cent.
The Business Standard, New Delhi, 09th November 2017

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

By
  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...
Post a Comment
Read more