a Christmas bonanza to the common man, the GST Council Saturday (22 December
2018) reduced tax rates on 23 goods and services, including movie tickets, TV
and monitor screens and power banks, and exempted frozen and preserved
vegetables from the levy.
reduced rates are likely to come into effect from January 1, 2019, Finance
Minister Arun Jaitley told reporters after the 31st meeting of Goods and
Services Tax (GST) Council here.
the 23 goods and services on which rates have been slashed, tax rate on seven
items in the 28 per cent slab has been brought down. With this, only 28 goods
are left in the highest 28 per cent tax bracket.
goods on which GST has been lowered to 18 per cent from 28 per cent at present
include pulleys, transmission shafts and cranks, gear boxes, retreated or used
tyres, power banks of lithium ion batteries, digital cameras, video camera
recorders and video game consoles.
28 per cent slab is now restricted to only luxury and sin goods apart from
auto-parts and cement - the tax rate on which could not be cut due to high
rationalisation is an ongoing process. When the original rates were fixed,
India had the most irrational taxation rates. Most of these items were charged,
along with cascading effect, at 31 per cent. So we had only transiently put
them at 28 per cent, because if we had immediately brought it down then the
revenue impact would have been there and therefore the social expenditure of
central and state governments would have suffered. So therefore we followed a
more realistic pragmatic and a prudent policy that as the revenues move up and
affordability increases we gradually bring it down. And therefore 28 per cent
bracket is already moving towards a sunset, except the luxury and sin items, 3
items which are used by upper income group and only 1 item of common use remains,"
from luxury and sin goods, mass use item cement and white goods like air
conditioners and dishwashers are left in the 28 per cent slab.
annual revenue implication of the rate cuts would be Rs 5,500 crore, he said.
GST on movie tickets costing up to Rs 100 cut to 12 per cent, from 18 per cent,
tickets over Rs 100 to attract 18 per cent GST, against 28 per cent earlier.
will have annual revenue implication of Rs 900 crore. Monitors and TV screens
up to 32 inches and power banks will attract 18 per cent GST, as against 28 per
cent earlier. The annual revenue loss on account of this would be Rs 1,500
crore. The rate rationalisation comes after Prime Minister Narendra Modi on
Tuesday indicated that the 28 per cent slab of GST would only be restricted to
a few select items, such as luxury and sin goods and said his government wants
to ensure that '99 per cent items attract 18 per cent or lower GST.
other items which will now attract 18 per cent tax include pulleys,
transmission shafts and cranks, gear boxes, retreated or used tyres, power
banks of lithium ion batteries, digital cameras, video camera recorders and
video game consoles.
The GST Council has also decided to slash tax
rate on parts and accessories for the carriages for disabled persons from 28
per cent to 5 per cent. Also third party insurance premium of goods carrying
vehicles has been reduced from 18 per cent to 12 per cent.
other items will attract lower GST rate of 5 per cent include marble rubble,
natural cork, walking stick, fly ash blocks.
books and vegetables (uncooked or cooked by steaming or boiling in water),
frozen, branded and put in an unit container and vegetables provisionally
preserved but unsuitable in that state for immediate consumption have been
exempted from GST. Services supplied by banks to Basic Savings Bank Deposit
account holders under the Jan Dhan Yojana will not attract GST. Air travel of
pilgrims by non-scheduled/charter operations being facilitated by the
government under bilateral arrangements will attract a lower GST rate of 5 per
Council has decided that 5 per cent would be levied on renewable energy devices
and parts for their manufacture.
asked about his message to the industry to pass on the rate cut benefits,
Jaitley said, "There is already anti-profiteering authority, which has
been more than active. Of course, they have to pass on the rate benefits. Or we
will do what we did in case of restaurants".
further said that the Council has decided that businesses which are supposed to
pay GST and file returns but have not done so far, should file it by March 31,
2019, to avoid penalty. Revenue Secretary Ajay Bhushan Pandey said that the new
return filing system will be launched on trial basis from April 2019 and would
be made mandatory from July 1, 2019.
GST Council has also decided to set up a centralised Authority for Advance
Ruling to hear those cases in which two divergent verdicts have been passed by
AARs of two different states.