12 June,2017 07:44 AM IST | New Delhi | IANS
The Goods and Services Tax (GST) Council at its 16th meeting here on Sunday revised the rates of 66 items out of the 133 for which representations had been received seeking change from the fitments originally made in the four-slab indirect tax struct
Union Minister for Finance and Corporate Affairs Arun Jaitley with MoS Santosh Gangwar and Revenue Secretary Hasmukh Adhia during the16th GST Council Meeting at Vigyan Bhawan. Pic/AFP
The Goods and Services Tax (GST) Council at its 16th meeting here on Sunday revised the rates of 66 items out of the 133 for which representations had been received seeking change from the fitments originally made in the four-slab indirect tax structure, Union Finance Minister Arun Jaitley said. Industry hailed the GST Council's latest decisions as beneficial, particularly for small and medium enterprises.
Following the 15th meeting of the council here earlier this month, held to decide on the six remaining items -- including gold and beedi -- from the Srinagar meeting which had decided upon 1,211 items, Jaitley had said that a committee of officers would examine rate adjustments, if any, based on the representations received from different trade and industry associations. Their recommendations were taken up by the council on Sunday.
"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," Jaitley, who heads the council, told reporters here following the meeting. The Minister explained that the cases for reduction had been considered keeping two objectives in mind.
"One 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.
Elaborating on some of the reductions, Jaitley said the tax on cashew has been cut from 12 to 5 per cent. Packaged foods like food and vegetable products such as pickles, chutnies, ketchup and instant food mixes, among others, which historically were taxed at 18 per cent, are going to be taxed at 12 per cent as these are items used by common people, he said.
Tax on cutlery will come down from 18 to 12 per cent, while computer printers will be lowered from 28 to 18 per cent. Insulin and agarbatti will go down from 12 to 5 per cent. Among other goods, Jaitley said school bags have been lowered from 28 to 18 per cent, while exercise books will come down from 18 to 12 per cent.
All goods and services under the pan-India GST regime, which will subsume the existing multiple central and state levies, have been categorised in four tax slabs of 5, 12, 18 and 28 per cent, besides those items that attract zero tax.
On Entertainment Tax, Jaitley said that following representations from the film industry, the GST Council has decided on a two-slab structure for cinema tickets, whereby those costing less than Rs 100 would be taxed less at 18 per cent, while those above will attract tax of 28 per cent.
In order to encourage job work outsourcing in sectors like diamond, leather, textiles, jewellery and printing, where workers take the work home, the GST rate has been reduced to 5 per cent.
Besides, traders, manufacturers and restaurants with turnover of up to Rs 75 lakh can avail themselves of the composition scheme, against Rs 50 lakh earlier, Jaitley said. He also said that lottery tickets and e-way bill are two specific issues that will be taken up at the next meeting of the council here on June 18.
While BJP-ruled states gave a go ahead to July 1 roll-out of the GST, West Bengal Finance Minister Amit Mitra continued to raise serious doubts over the feasibility of the new indirect tax regime and proposed its postponement by a month or so.
"I have also added a caveat (in the GST Council meeting) that July 1 looks extremely difficult. But you cannot do frugal innovation for world's largest fiscal reform called GST. And you are going to start GST from July 1. So my submission was, let us not do frugal innovation for something which is world's largest fiscal reform," Mitra told reporters after the meeting here.
He said that there is no harm in postponement of the GST "by one month or so". Union Finance Minister Arun Jaitley reiterated that the traders and industry had no option but to get ready by July 1 as no postponement was on the anvil.
"Irrespective of the date at which is to start, some people will say we are not ready. They have no option but to get ready. You require honest intent for that," he told reporters when asked about some industry representatives seeking more time for the roll-out.
Industry and stakeholders on Sunday hailed the GST Council's move of bringing traders, manufacturers and restaurants below Rs 75 lakh turnover under the Composition Scheme saying that it will boost small and medium enterprises in the country.
"This is a big decision in favour of traders. Its a people -centric decision, will benefit for the common people. The biggest win is for SMEs today. Biggest development for small and medium enterprises (SMEs) and small businesses that contribute on a large scale to the GDP and job sector of the country," the West Bengal Finance Minister said.
"The purpose of GST is to protect SMEs, protect states' revenues and benefit people. By stimulating SMEs, which are labour intensive, taxes will go up, impact on GDP will go up and if implemented in appropriate manner, it can lead to greater revenues," Mitra said.
Traders who have below Rs 75 lakh turnover will have to pay 1 per cent tax, manufacturers will have to pay 2 per cent while restaurant businesses will have to pay 5 per cent if they opt to go for the Composition Scheme under GST.
Pratik Jain, Partner and Leader Indirect Tax, PwC, said: "Increasing the composition scheme limit to Rs 75 lakh from Rs 50 lakh will provide relief to many more small businesses, though service providers (except restaurants) continue to remain outside the ambit of composition levy."
Mahesh Jaising, Partner, Indirect Tax, BMR and Associates LLP said: "The GST Council has decided to increase the threshold of the composition scheme. This should mean that a significant number of SME sector players should benefit from not having to meet with detailed compliances under GST and also having a less financial burden, on account of GST."
