GST Council after big rate cuts only 35 goods left in 28% tax bracket
During the year, the GST Council had dropped 191 items from 28 per cent slab. Officials have revealed that there are only 35 items remaining in this slab. They include ACs, digital cameras, video recorders, kitchen utensils, cleaning machines, and automobiles etc.,
The Goods and services tax (GST) was launched in July 2017 in India and at the time of launch about 226 items were in 28 per cent tax slab and now it has reached 35 only.
The Goods-service tax (GST) has declined on 88 items of the daily consumption. The GST Council board, which met on Saturday, changed many items from 28 per cent slab to 18 per cent slab.
The Board of Ministers, headed by Finance Minister Piyush Goyal, has taken few decisions to benefit the middle-class people at the 28th meeting. The revised taxes will come into force from 27th of this month. After the new decision comes into force only 35 items will remain in 28 per cent slab.
Among them are automobile parts, tyres, motor vehicles, cruise ships, aircraft, soda, betting, tobacco, cigarettes and pan masala. Experts believe that the GST council may also focus on some of the items in the tax slab 28 per cent after revenue stabilization. They also believe that council may look at further rationalisation of the 28 per cent slab, to restrict the highest tax slab to super luxury and sin goods.
Deloitte India Partner M S Mani said it would be logical to expect that once the GST collections after the recent reductions stabilise, the remaining items such as televisions of all sizes, dishwashers, digital cameras, air conditioners could be considered for an 18 per cent rate.
“It would be ideal if only demerit goods are retained in the 28 per cent slab so that a gradual movement towards having fewer GST slabs can be initiated,” Mani said.
After the latest rounds of rate cuts by the GST Council on July 21, only 35 items are left in the 28 per cent tax slab, an official said.
The Council brought down tax rates to 18 per cent from 28 per cent on 15 items, including vacuum cleaners, washing machine, 68 cm (27 inch) TV, fridge, laundry machines, paints and varnishes.
“The rate cuts would lead to a revenue loss of about Rs 60 billion,” the official said.
EY Partner Abhishek Jain said: “The reduction of GST rates from 28 per cent to 18 per cent shows that directionally, the Government seems to be clear that the 28 per cent rate should be restricted to super luxury and sin goods”. GST council also took a decision that no tax for Sanitary pads.