GST Council To Consider Slashing Rates On Common Use Goods
The Council of Goods and Services Tax may consider lowering tax rates on a variety of goods such as handmade furniture, plastic products and daily use items such as shampoo, and simplify the rules for filing applications at this week’s meeting.
The Council, headed by Finance Minister Arun Jaitli, is scheduled for a meeting on November 10 to consider reducing the GST of 28 percent to certain items of common use, government officials said.
In further exemption for small and medium-sized enterprises, the panel is likely to rationalize the tax rate in sectors where the overall incidence of taxation has increased as the goods were previously exempt from excise duty or attracted lower rates of value added tax in the previous indirect tax regime.
The Council meets every month, because the goods and services Tax (GST) regime, which brought together more than a dozen central and state taxes, was introduced on July 1. The meetings resulted in an array of changes to ease the burden on the legal compliance of business and also provided relief for consumers.
Official SAIDA rationalization points in the 28 percent tax bracket is expected. Most daily destinations can be lowered to 18 percent. In addition, the tax rate on items such as furniture, electrical switches, plastic pipe can be relooked.
All kinds of furniture attract a tax of 28 per cent GST. Handmade wooden furniture craftsmen of the informal sector and is mainly used by middle-class families and were requirements to reduce the tax burden on them.
In addition, some elements of plastic involve 18 per cent of the GST, but products like shower enclosures, sinks, washbasins, bidets, lavatory pans, seats and covers, flushing cisterns and similar sanitary ware of plastics to attract 28 per cent tax.
There is a need to rationalize the tax rates on these items, officials said.
Manufacturers of plastic in their representation in the revenue department said that 80 per cent of the industry is in category IHR.
Moreover, the rate at GST weighed machines, compressors can also be rationalized to 18 percent to 28 percent.
Officials said 90 percent of manufacturers from small and medium industries, which in the pre-GST era were exempted from excise duty on the finished value of less than Rs 1,5 crore. Thus, such machines only attracted 14.5 per cent VAT.
As for the compressor, the overall incidence of pre-GST was 17.5 per cent (12.5 per cent excise tax and 5 percent VAT), they said, stressing the need for rationalization of the tax burden.
GST Council, consisting of representatives of all states have to rationalize tax rates for more than 100 points. Council last month approved the concept paper to be followed by the landing Committee when deciding on future rate changes.
Under the GST various goods and services in the brackets 5, 12, 18 and 28 percent.
GST has to carry more than a dozen tax, including excise, service tax and VAT, and turned India into a single market