With major rate cuts making luxury items cheaper; GST council tries to win million hearts
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New Delhi, December 22: “The Council has approved the proposal to form a 7 Member Group of Ministers to study the revenue trend, including analysing the reasons for structural patterns affecting the revenue collection in some of the States. The study would include the underlying reasons for deviation from the revenue collection targets vis a vis original assumptions discussed during the design of GST system, its implementation and related structural issues.”, informed Finance Minister Arun Jaitley today during the 34th GST council meeting in the national capital.
“The Group of Ministers will be assisted by the committee of experts from Central Government, State Governments and the NIPFP (National Institute of Public Finance and Planning), who would study and share the findings with the group. The GoM in turn would give its recommendation to the GST Council.”, he added in relation.
Meanwhile, the council has approved the use of new return filing system to be started on trial basis from April 1, followed by it’s implementation mandatorily by July 1. Due dates for GST Annual Return and Audit Report are however extended till 30th June 2019. Jaitley has removed six items from the 28 per cent tax bracket under the Goods and Services Tax (GST) regime following the mindset to cover 99 percent of the goods under single slab system. “There were 34 items in the 28 per cent tax bracket which included luxury and 'sin goods' till now. Today's GST rate reduction will have an overall impact on revenue of Rs 5500 crore”, he said in relation.
GST Council in the 31st meeting held on 22nd December, 2018 at New Delhi took following decisions relating to changes in GST rates on goods and services. The decisions of the GST Council have been presented in this note for easy understanding. The same would be given effect to through Gazette notifications/ circulars which shall have force of law.
GST rate reduction on goods which were attracting GST rate of 28% now to be considered under 18% slab constitute monitors and TVs of upto screen size of 32 inches, Digital cameras and video camera recorders, Video game consoles and other games and sports requisites, Power banks of lithium ion batteries. However, the same now to be considered under the 5% slab rates constitute accessories for the carriages for disabled persons sole.
Meanwhile the services including cinema, insurance, have become cheaper as the rate cut follows fall of 6% complete. Earlier being, charged 18%, now these will be charged under 12% slab rates of GST. Services supplied by banks to Basic Saving Bank Deposit (BSBD) account holders under Pradhan Mantri Jan Dhan Yojana (PMJDY) shall be exempted.
On December 18, Prime Minister Narendra Modi had announced the government is aiming to bring 99 per cent of items below the 18 per cent GST slab and warned of stringent action against defaulters of bank loan and fugitives.
"The Goods and Services Tax Council on Wednesday slashed tax rates for 23 commonly used items that have been reduced from 18 per cent to 12 and 5 per cent respectively, said Puducherry Chief Minister V Narayanasamy." The fresh rate rationalisation is the government's attempt to streamline GST and make it more people-friendly. Many items including television, computers and auto parts will be cheaper now.