With the Goods and Services Tax (GST) set for a July roll-out, Union Finance Minister Arun Jaitley on Sunday said the GST Council has reduced tax rates of 66 items as against representations received for 133 items. “…133 representations have been received by the GST Council. An officers committee made recommendations after studying these representations…The GST Council has reduced the tax levels in 66 out these 133 cases,” Jaitley said while addressing a press conference after 16th GST meeting.
The list of items which saw a reduction in tax rates includes computer printers, insulin, agarbattis, cashew, plastic tarpaulin, exercise books, children’s colouring books, tractor components and cutlery. Meanwhile, school bags will attract a tax of 28 per cent.
“The reduction was based on two principles, one is to maintain the equivalence levels and other is a change in user behaviour,” Jaitley said. He further said traders, manufacturers and restaurants with a turnover of up to Rs 75 lakh can avail the composition scheme, against Rs 50 lakh earlier.
As far as entertainment tax is concerned, Jaitley said two rates have been fixed under the GST. “Entertainment tax is levied by states, the weighted average for the entire country is about 30 percent. But several state governments give an exemption for a cinema of that particular language of the state. In GST, there is no centralised exemption. If a state wants, it can refund the state GST for promoting regional cinema. After detailed discussions, it was decided that there would be two GST rates. For tickets priced above Rs 100, a 28 percent tax will be levied, for below Rs 100 it will be reduced to 18 percent,” the Finance Minister said.
The latest development comes nearly a month after the Finance Minister unveiled a multi-tiered service tax structure to distribute services under four slabs: 5, 12, 18 and 28 per cent. Under the proposed indirect tax regime, education, healthcare and non-AC rail travel will continue to remain exempted.
The Council has slashed tax rate on computer printers to 18 percent from 28 percent and reduced GST on insulin, agarbatti to 5 percent, school bags will attract a tax of 28 percent. GST on cashew has been reduced from 12 to 5 percent, while several packaged foods which were charged at 18 percent earlier have been reduced to 12 percent, including fruits, pickles.
When asked about tax revision on sanitary napkins, Jaitley responded, “What has been decided earlier remains.” The Finance Minister also said the next meeting of the GST Council will be held on June 18 in order to take up lottery taxes, e-way bill.
Touted as the biggest reform in the country’s indirect tax structure, GST will introduce a single tax on supply of goods and services, right from the manufacturer to the consumer. Upon its implementation, it will absorb all central and state-level taxes and levies on all goods and services within an integrated tax having two components: a central GST and a state GST.
With inputs from PTI, ANI