GST Council reduces tax rates on more than 50 items

GST Council reduces tax rates on more than 50 items

GST Council reduces tax rates on more than 50 items

Finance Minister Piyush Goyal said the tax rate on 17 items used by the middle class has been reduced by 10 percentage points to 18 per cent.

Coming out as a major relief for all the women, sanitary napkins have now been exempted from the GST. In what appeared to be a mini-Budget announcement to create a feel good factor, the council announced significant reductions in many goods and services. "Summary of GST proposal for a common man: You can celebrate Rakhi in a clean and newly-painted house while having an ice-cream and watching a movie on a small TV.with multiple gift options ranging from footwear to washing machine", said Pratik Jain, who heads the indirect tax practice at consulting firm PwC. On the revenue loss from these cuts, he said with simplification of processes, compliance would improve which would in turn boost revenue.

The minister also said that there would be a special meeting of the GST Council on August 4 to discuss in detail ways to promote MSME and small industries and to promote digital payment systems among more people, especially the rural and the poor. The Council also announced quarterly return-filing for businesses with an annual turnover threshold of upto Rs 5 crore, a move that will benefit 93 per cent of the registered GST taxpayers. He said, besides revenue collection, the GST council will now focus on job creation as well.

Taxes on handbags, jewellery boxes, wooden photo frames, stone art wear, ornamental frame mirrors, glass art ware, aluminum art ware and handmade carpets have been cut to 5 percent from 12 percent.

The council also deferred the implementation of reverse charge mechanism by another year and now it will come into force from October next year.

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The council also approved the proposal to allow quarterly return filing for taxpayers with a turnover of upto Rs 5 crore, a move that will benefit almost 93 percent of tax assessees as they would now be required to file returns only once in three months. "Glad that finally GST Council has made this happen". The RCM, which was already on hold till September 2018, is considered as an anti-evasion tool.

It also eased the burden for hotels, the textiles sector and small businesses at a marathon nine-hour meeting.

"A deifinite timeline will be declared once we are informed about it by the GST Network", Goyal said.

The issue of sugar cess was also reportedly taken up by the GST Council during its meeting today, but a definitive decision has not been reached yet.

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