The GST Council on Friday slashed tax rates on 177 items in the top 28% bracket, which include chocolates, chewing gum, shaving cream, aftershave kits, beauty products, granite and marble. GST Council member and Bihar state finance minister Sushil Kumar Modi said on the sidelines of the meeting that the Council has lowered tax rates on a wide range of items, bringing down the number of items remaining in the highest slab of 28% from 227 to only 50. The GST Council has decided to keep only 50 items, mostly demerit, sin and luxury goods in the 28% bracket, he said, according to news reports from the meeting venue.
“There were 227 items in the 28% slab. The fitment committee had recommended that it should be pruned to 62 items. But the GST Council has further pruned 12 more items,” Sushil Kumar Modi said. The two-day GST council meeting is currently underway in Assam capital Guwahati. The GST Council is likely to discuss lowering tax rates on dining in AC restaurants as well.
Among other items that have likely moved to the lower tax slab are handmade furniture and plastic products. All types of furniture used to attract a 28% tax under the GST. Wooden furniture is handmade by unorganised sector artisans and is mostly used by middle-class families and there have been demands for lowering tax incidence on them. Also, some items of plastic attracted 18% GST but goods such as shower baths, sinks, wash basins, bidets, lavatory pans, seats and covers, flushing cisterns and similar sanitary ware of plastics were under 28% levy.
To provide other relief to the small businesses, the council is also likely to allow taxpayers to file their returns on a quarterly basis instead monthly to make less burdensome. In a further relief to small and medium enterprises (SME), the panel is likely to rationalise tax rate in sectors where the total incidence of taxation has gone up because the goods were earlier either exempt from excise or attracted lower VAT rates in the previous indirect tax regime.
The GST regime slots items under four primary tax rate slabs — low rate of 5%, standard rates of 12% and 18%, and high rate of 28%. Other than this, gold and jewellery are taxed at a concessional GST rate of 3%, while rough diamonds are having a 0.25% levy.