BIG NEWS! GST rates on 177 items slashed from 28% to 18%
Guwahati, November 10: Goods and Services Tax (GST) Council in its 23rd meet slashed the tax rate on 177 goods. As per latest reports, of the 227 items placed in 28% GST slab, the tax rates of 177 items have been slashed to 18%, leaving 50 which are mostly luxury items.
The all-powerful council pruned the list of items attracting the top 28 percent tax rate to just 50 from 227 previously, Modi told reporters.
Facing intense heat from opposition-ruled states over keeping mass used goods in the 28 per cent bracket which was meant for luxury and de-merit goods, the Council pruned the list to 50 as against 62 that was recommended by its fitment committee.
“There were 227 items in the 28 per cent slab. The fitment committee had recommended that it should be pruned to 62 items. But the GST Council has further pruned 12 more items,” Modi said.
He said all types of chewing gum, chocolates, preparation for facial make-up, shaving and after-shave items, shampoo deodorants, washing powder detergent and granite and marble will attract lower 18 per cent tax rate.
“There was unanimity that in 28 per cent category there should be only sin and demerit goods.
So, today the GST Council took a historic decision, that in the 28 per cent slab there will be only 50 items and the remaining items have been brought down to 18 per cent,” he said.
Paints and cement have been retained in the 28 per cent tax bracket, he said.
“Luxury goods like washing machines and air conditioners have been retained at 28 per cent.” The decision taken by the GST Council will have a revenue implication of Rs 20,000 crore annually.
“There is consensus that slowly 28 per cent slab should be brought to 18 per cent. But it will take some time because it has a big revenue implication,” he said.
Notably, The Goods and Services Tax implemented from July 1, has 5 tax slabs of 0%, 5%, 12%, 18% and 28%. Four months after the GFT was rolled out, the panel headed by Union Finance Minister Arun Jaitley looked at the most comprehensive overhaul of rates, easing returns filing and providing more relief to small and medium enterprises.
Recommendations made On GST Rate changes by the GST Council as per discussions in its 23rd Meeting on 10th November 2017 held at Guwahati
In the meeting held today, that is 10th November, 2017, the Council has recommended major relief in GST rates on certain goods and services. These recommendations spread across many sectors and across commodities.
As per these recommendations, the list of 28% GST rated goods is recommended to be pruned substantially, from 224 tariff headings [about 18.5% of total tariff headings at 4-digit] to only 50 tariff headings including 4 headings which have been partially reduced to 18% [about 4% of total tariff headings at 4-digit].
Further, the Council has recommended changes in GST rates on a number of goods, so as to rationalise the rate structure with a view to minimise classification disputes.
The Council has also recommended issuance of certain clarifications to address the grievance of trade on issues relating to GST rates and taxability of certain goods and services.
On the services side also, the Council recommended changes in GST rates to provide relief to aviation & handicraft sectors and restaurants.
Major recommendations of the Council are summarised below.
Pruning of list of 28% rated goods: The Council has recommended reduction in GST rate from 28% to 18% on goods falling in 178 headings at 4-digit level (including 4 tariff heading that are partially pruned). After these changes, only 50 items will attract GST rate of 28%.
a) Goods on which the Council has recommended reduction in GST rate from 28% to 18% include:
- Wire, cables, insulated conductors, electrical insulators, electrical plugs, switches, sockets, fuses, relays, electrical connectors
- Electrical boards, panels, consoles, cabinets etc for electric control or distribution
- Particle/fibre boards and ply wood. Article of wood, wooden frame, paving block
- Furniture, mattress, bedding and similar furnishing
- Trunk, suitcase, vanity cases, brief cases, travelling bags and other hand bags, cases
- Detergents, washing and cleaning preparations
- Liquid or cream for washing the skin
- Shampoos; Hair cream, Hair dyes (natural, herbal or synthetic) and similar other goods; henna powder or paste, not mixed with any other ingredient;
- Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, perfumery, cosmetic or toilet preparations, room deodorisers
- Perfumes and toilet waters
- Beauty or make-up preparations
- Fans, pumps, compressors
- Lamp and light fitting
- Primary cell and primary batteries
- Sanitary ware and parts thereof of all kind
- Articles of plastic, floor covering, baths, shower, sinks, washbasins, seats, sanitary ware of plastic
- Slabs of marbles and granite
- Goods of marble and granite such as tiles
- Ceramic tiles of all kinds
- Miscellaneous articles such as vacuum flasks, lighters,
- Wrist watches, clocks, watch movement, watch cases, straps, parts
- Article of apparel & clothing accessories of leather, guts, furskin, artificial fur and other articles such as saddlery and harness for any animal
- Articles of cutlery, stoves, cookers and similar non electric domestic appliances
- Razor and razor blades
- Multi-functional printers, cartridges
- Office or desk equipment
- Door, windows and frames of aluminium.
- Articles of plaster such as board, sheet,
- Articles of cement or concrete or stone and artificial stone,
- Articles of asphalt or slate,
- Articles of mica
- Ceramic flooring blocks, pipes, conduit, pipe fitting
- Wall paper and wall covering
- Glass of all kinds and articles thereof such as mirror, safety glass, sheets, glassware
- Electrical, electronic weighing machinery
- Fire extinguishers and fire extinguishing charge
- Fork lifts, lifting and handling equipment,
- Bull dozers, excavators, loaders, road rollers,
- Earth moving and levelling machinery,
- Escalators,
- Cooling towers, pressure vessels, reactors
- Crankshaft for sewing machine, tailor’s dummies, bearing housings, gears and gearing; ball or roller screws; gaskets
- Electrical apparatus for radio and television broadcasting
- Sound recording or reproducing apparatus
- Signalling, safety or traffic control equipment for transports
- Physical exercise equipment, festival and carnival equipment, swings, shooting galleries, roundabouts, gymnastic and athletic equipment
- All musical instruments and their parts
- Artificial flowers, foliage and artificial fruits
- Explosive, anti-knocking preparation, fireworks
- Cocoa butter, fat, oil powder,
- Extract, essence ad concentrates of coffee, miscellaneous food preparations
- Chocolates, Chewing gum / bubble gum
- Malt extract and food preparations of flour, groats, meal, starch or malt extract
- Waffles and wafers coated with chocolate or containing chocolate
- Rubber tubes and miscellaneous articles of rubber
- Goggles, binoculars, telescope,
- Cinematographic cameras and projectors, image projector,
- Microscope, specified laboratory equipment, specified scientific equipment such as for meteorology, hydrology, oceanography, geology
- Solvent, thinners, hydraulic fluids, anti-freezing preparation
b) Goods on which the Council has recommended reduction in GST rate from 28% to 12% are:
- Wet grinders consisting of stone as grinder
- Tanks and other armoured fighting vehicles
(II) Other changes/rationalisation of GST rates on goods:
a) 18% to 12%
- Condensed milk
- Refined sugar and sugar cubes
- Pasta
- Curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasoning
- Diabetic food
- Medicinal grade oxygen
- Printing ink
- Hand bags and shopping bags of jute and cotton
- Hats (knitted or crocheted)
- Parts of specified agricultural, horticultural, forestry, harvesting or threshing machinery
- Specified parts of sewing machine
- Spectacles frames
- Furniture wholly made of bamboo or cane
b) 18% to 5%
- Puffed rice chikki, peanut chikki, sesame chikki, revdi, tilrevdi, khaza, kazuali, groundnut sweets gatta, kuliya
- Flour of potatoes put up in unit container bearing a brand name
- Chutney powder
- Fly ash
- Sulphur recovered in refining of crude
- Fly ash aggregate with 90% or more fly ash content
c) 12% to 5%
- Desiccated coconut
- Narrow woven fabric including cotton newar [with no refund of unutilised input tax credit]
- Idli, dosa batter
- Finished leather, chamois and composition leather
- Coir cordage and ropes, jute twine, coir products
- Fishing net and fishing hooks
- Worn clothing
- Fly ash brick
- d) 5% to nil
- Guar meal
- Hop cone (other than grounded, powdered or in pellet form)
- Certain dried vegetables such as sweet potatoes, maniac
- Unworked coconut shell
- Fish frozen or dried (not put up in unit container bearing a brand name)
- Khandsari sugar
e) Miscellaneous
GST rates on aircraft engines from 28%/18% to 5%, aircraft tyres from 28% to 5% and aircraft seats from 28% to 5%.
GST rate on bangles of lac/shellac from 3% GST rate to Nil.
(III)Exemption from IGST/GST in certain specified cases:
Exemption from IGST on imports of lifesaving medicine supplied free of cost by overseas supplier for patients, subject to certification by DGHS of Centre or State and certain other conditions
Exemption from IGST on imports of goods (other than motor vehicles) under a lease agreement if IGST is paid on the lease amount.
To extend IGST exemption presently applicable to skimmed milk powder or concentrated milk, when supplied to distinct person under section 25(4) for use in production of milk for distribution through dairy cooperatives to where such milk is distributed through companies registered under the Companies Act.
Exemption from IGST on imports of specified goods by a sports person of outstanding eminence, subject to specified conditions
Exemption from GST on specified goods, such as scientific or technical instruments, software, prototype supplied to public funded research institution or a university or IISc, or IITs or NIT.
Coverage of more items, such as temporary import of professional equipment by accredited press persons visiting India to cover certain events, broadcasting equipments, sports items, testing equipment, under ATA carnet system. These goods are to be re-exported after the specified use is over.