GST (goods and services tax) Council is likely to slash the indirect tax rates on various items at its meeting in Guwahati. At present, vacuum cleaners, refrigerators, and washing machines attract 28 percent tax. As many as 165 such items could be moved to the 18 percent category, with only 62 attracting the highest rate. Some common items might also have their rates slashed from 18 percent to 12 percent, as demanded by states such as West Bengal. At the Friday meeting, the council will also have a presentation about the inclusion of real estate under the new indirect tax regime. Reducing the compliance burden on taxpayers would be a part of the exhaustive agenda. If these suggestions of the rate-fitment committee are accepted, it would be the biggest rejig of rates since the GST roll-out on July 1 this year. Many common goods, which make up 75 percent of the highest GST slab, will become cheaper.
“This will be a big relief for consumers and industry. It is to be seen if all states accept it,” said a government official on condition of anonymity. Over 1200 products and services were fitted into one of the four tax slabs — 5, 12, 18, and 28 percent — before the roll-out. A state government official said there would be some discussion on trimming of items in the 28 percent slab. “Some rules need to be formulated on rate reduction. It cannot be done by the fitment committee alone. There needs to be some basis for that,” said the official.
Finance Minister Arun Jaitley had said at an event on Tuesday that some of the items should never have been in the 28 percent slab. The GST Council in the last three or four meetings has reduced rates on over 100 items, bringing them down either from 28 percent to 18 percent or from 18 percent to 12 percent. A finance ministry official said initially items that had attracted 12.5 percent central excise and 14.5 percent value-added tax (VAT) were mechanically put in the 28 percent slab. – Business Standard