The Two-days meeting of GST Council comprising State Finance Minister is headed by Finance Minister Mr Arun Jaitley at Guwahati. Bringing the common man under relief, the GST council may reduce the rates of more than 150 items under mass consumption, leaving only luxurious items under highest tax slab rate of 28%.
Earlier there were 227 items under the highest tax slab of 28%, which was the most criticised factor under this tax regime as it was major shortcoming for the consumers. The highest tax slab of 28% comprises only luxurious items and goods such as tobacco and alike. The said reduction of tax rate results into revenue implication of Rs 20,000 Crore.
The Finance Minister of Bihar, Mr Sushil Modi reports that there was unanimity on slashing down the slab of 28%. This big revenue implication will cause this change on slower pace.
The suggested changes in the Tax rate on few products and goods under mass consumption (daily usage household products) are listed below:
- aftershave lotion,
- shoe polish,
- preparation for facial make-up
- washing powder and detergent
- granite and marble
- chewing gum and nutritious drinks and alike
Luxurious goods including Air- Conditions, washing machine and sin goods like tobacco etc. are still under highest tax rate of 28%.
As reported under our previous article, the Group of Ministers also considers uniformity of tax rate on room tariff of hotels and restaurants. Recommendation has been given to attract uniform rate of 18% for hotels having room tariff more than Rs 7,500/-.
With lowering the Tax rate, council is also thinking and giving recommendation on filing 3 returns per month which at present seems to be a heavy compliance burden on a small as well as on the large Tax payers. As per the suggestions given by experts, council is expected to grant a huge relief to small and medium enterprises (SMEs) in terms of Compliance burden.
With these above mentioned concerns, the Demonetisation policy which was rolled out a year ago is being questioned by various Government officials in the Council meet held on Friday 11th October, 2017.
Regular and compliant taxpayers are expecting more relief in terms of administration of GST Registration and GST return filing and lowering the tax burden and higher liberalization to small tax payers. For the benefits and ease for every taxpayer, GST Council is conducting meeting every month to resolve the constraints acting as hindrance for implementation of new tax regime and this will hopefully bring significant change in the country.
Stay tuned for more updates on Goods and Service Tax Council Meeting for next two days!