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GST Council removes 178 items from 28% slab, only 50 left (Roundup)

IANS  |  Guwahati 

In a major revamp of the structure, the Council on Friday removed 178 items from the highest 28 per cent category while cutting the on all restaurants outside starred-hotels to 5 per cent but withdrawing input credit facility for them. Industry welcomed the changes saying these would boost consumer demand

Only 50 products, including luxury and sin items, white goods, cement and paints, automobiles, aeroplane and yacht parts have been retained in the top 28 per cent slab.

"The Council has decided to slash slabs of 178 items from 28 per cent to 18 per cent. It will be applicable from 15th of this month (November)," Union Finance Minister Arun Jaitley said while briefing media persons after the two-day meeting here.

West Bengal Finance Minister Amit Mitra earlier told reporters that the loss on account of a "hasty and ill-designed" had resulted in the exchequer losing around Rs 60,000 crore for the Centre and Rs 30,000 crore for the states in just the first three months.

With the latest decisions, has been cut on a host of consumer items such as chocolates, chewing gum, shampoo, deodorant, shoe polish, detergents, nutrition drinks, marble and cosmetics.

Luxury goods such as washing machines and air conditioners have been retained at 28 per cent.

"Thirteen items, which were earlier under 18 per cent, have been brought down to 12 per cent. Six goods have come down from the 18 per cent slab to five per cent, eight items have come down from 12 per cent to 5 per cent and six items from 5 per cent to zero tax," Jaitley said.

Eating out has become cheaper as all restaurants outside high-end hotels charging over Rs 7,500 per room will uniformly levy of 5 per cent. The facility of input credit for restaurants is, however, being withdrawn as they had not passed on this benefit to consumers, Jaitley said.

Restaurants in hotels with rooms above Rs 7,500 per day would continue to pay 18 per cent with the benefit of input credit.

The Council also made changes in return filing procedures to reduce the compliance burden for the small taxpayers. It decided that filing GSTR 3B would continuing till March 31, 2018.

"All taxpayers will continue to file GSTR 3B. In case of small payer or nil payments, 3B will be simplified so that in two or three steps one can easily file their return," Finance Secretary Hasmukh Adhia told reporters.

"The Council also decided that for this fiscal, only GSTR 1 will be filled and because we are running in a backlog -- where we will file return for July only by December 11," he said.

"For taxpayers above Rs 1.5 crore turnover and who have large number of invoices, we do not want to keep their returns pending for a quarter and instead they should file their invoices monthly," he added.

The Council also decided that penalty for late filing for a 'Nil' payer would now be at Rs 20 per day from the earlier Rs 200, and for others, it was cut to Rs 50 per day.

The Council deferred a decision on bringing real estate under to its next meeting, for lack of time.

Welcoming the changes, industry body Assocham said these would lead to a pickup in consumer demand and help revive business sentiment.

"The increase in the composition scheme threshold would make life much easier for the small business entities," Assocham Secretary General D.S. Rawat said in a statement.

Deloitte India Partner Mahesh Jaising said: "The reduction in rates should reduce the burden on the common man. Hopefully, this is the start to the changes which are eagerly anticipated."

Abhishek Jain, Partner, EY said the Council meeting had produced "a mixed bag for the real estate sector with positives like rates of granite and marble being lowered from the current 28 per cent to 18 per cent, and negatives like non-alteration of cement rates."

"As typically, in relation to construction becomes a cost to most, non lowering of the significant costs of cement has disappointed the construction industry and customers as a whole," he said.

--IANS

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, November 10 2017. 21:44 IST
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