Paying heeds to the demands of the traders and businessmen who have had to wriggle under the ever since the launch of GST in July, the government has decided to lower the rates of around 27 items and some services.
The rates are slashed across the slabs – 5%, 12%, 18% and 28%. With the rates getting eased across several GST Slabs, not only the business community but even the public, in general, can now smile and embrace the new indirect tax regime, which subsumes multiple state and central level levies.
Food, Medicines & Daily Use Items Come Under 5% Rate
Giving a relief to the households of the country, the GST Council meeting chaired by Finance Minister Arun Jaitley has decided to move food and daily use items, which were earlier taxed at the rates of 12% and above, to the lowest of 5%. The list includes unbranded namkeen, sliced dried mango, unbranded ayurvedic medicine, homeopathy medicine, khakra and plain chapati, real zari, paper waste or scrap, food packets provided to economically weaker sections, duty credit scrips, biomass briquettes, plastic, rubber waste, hard rubber waste or scrap, e-waste, etc.
Textile Business Given a Breather with a Cut in Tax Rate
Textile manufacturers and the customers who buy the clothes can now heave a sigh of relief with the products coming under 12% rate from the higher slabs. Products, like man-made yarn, sewing thread of man-made & synthetic filaments and man-made staple fibers yarn, would now attract 12% rate, as opposed to a higher slab of 18% earlier.
Which Falls Under 18% Now?
Some products, which were getting taxed at the highest rate of 28%, have now come to a slab lower to 18%. The products include diesel engine parts, pump parts, stones used for flooring, as well as stationery items such as poster colours and modelling waste.
Other Important Decisions Taken by the GST Council
The council, apart from lowering the rates, has taken some critical decisions to improve the ease of business in India. Wanna have a look at those decisions? Check out the pointers below.
- Businesses with a turnover of up to ₹1.5 crore are allowed to file returns on a quarterly basis as opposed to monthly.
- Exporters are exempted from paying Integrated Goods and Services Tax (IGST) for 6 months.
- The government has decided to process the refund cheques of exporters for July and August by October 10 and October 18, respectively.
- In a bid to digitize the export business of India, the government has decided to develop e-wallet gateway and launch the same by April 2018.
- The government has widened the scope of composition scheme, which allows businesses to pay 1%-5% tax without having to deal with the complex formalities, to include the firms with a turnover of up to ₹1 crore from the earlier limit of ₹75 lakh.
- As per several media reports, the government has also eliminated the need to show PAN details for buying jewellery worth more than ₹50,000, giving more reasons to celebrate this Diwali.
Will Real Estate Come Under the Purview of GST?
Finance Minister has somewhat hinted of keeping the real estate sector under the ambit of GST by acknowledging that it records the highest amount of tax evasion with a huge bulk of cash component. When the GST Council holds the next meeting on November 9, 2017, deliberations will be made from the state and centre representatives on the issue. So, whether GST will take realtors under its purview or not will be known after the scheduled meeting.
Rates of 40+ Items Slashed in September
The council in its earlier meet in September had reduced the tax rates of more than 40 items. These items include fabric, saree fall, dhoop batti, idli, dosa, batter, raincoats, table, kitchenware. Computer monitors, beads, etc.
So, make most of the slashing tax rate regime and buy essential items without having to pinch your wallet. It won’t be a surprise if the rates under GST tax slabs reduce further to add to your comfort.