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Wednesday, July 18, 2018

GST Council reduces tax rates of 29 handicraft items, decision on petrol in next meeting

Finance Minister Arun Jaitley said about 29 handicraft items will attract no tax and asserted that the move was taken to protect jobs in the hand-made industry. The revised GST rates will be applicable from January 25.

By: Express Web Desk | New Delhi | Updated: January 18, 2018 8:21:53 pm
Arun jaitley on GST Union Finance Minister Arun Jaitley said the first quarter GST collection was Rs 1,307 crore. (File Photo)

The GST Council on Thursday decided to reduce tax rates of 29 items and 53 categories of services, while Finance Minister Arun Jaitley said a decision on bringing petroleum and other exempt goods under the purview of GST would be taken at the next meeting.

Addressing the media after the meeting, Jaitley said about 29 handicraft items would attract no tax and asserted that the move was taken to protect jobs in the hand-made industry. India exports about Rs 4,000 crore of handicrafts every year, including handmade carpets. Presently, handicraft items are placed in the 12-18 per cent tax slab. The revised GST rates will be applicable from January 25.

The minister also said the provision of carrying e-way bill, when moving goods between states, would be implemented from February 1. Fifteen states will also implement intra-state e-way bill. Jaitley said the e-way bill system will plug tax evasion and streamline the transportation sector. Under the GST regime, rolled out from July last year, inter-state road transport of goods exceeding Rs 50,000 in value and beyond 10 km, will mandatorily require e-way bill from February 1.

Simplification of GST return filing process was also taken up in the meeting. Jaitley said Infosys board chairman Nandan Nilekani gave a detailed presentation on simplifying the return filing process to a ministerial group led by Sushil Modi and an IT committee under Ajay Bhushan Pandey. Jaitley also said the first quarter GST collection was Rs 1,307 crore and the direct tax collection had breached the target of the government and stood at 18.7 per cent.

The Council also discussed a range of legal amendments required in the GST-related laws, so that the government can push through the changes in the Budget session of Parliament, which starts on January 29.

Vinay Sethi, Head, Market Development, Tax and Accounting, Thomson Reuters, South Asia, said, “The 25th meeting of the GST council held against the backdrop of falling GST collections resulted in some positives such as reduction of GST rates on handicraft goods as the higher rate of GST would have adversely impacted the large population employed in handicrafts industry.”

He also heralded the step of expediting efforts towards simplification of return filing process. “Reduction in rates of multiple services; expediting of efforts towards simplification of return filing process and consolidation of GSTR-1,2 and 3; commitment to bring the petroleum products and real estate under the purview of GST sooner than later is a move towards the right direction,” he said.

“Mandatory Issuance of inter-state e-waybill from next month is an anti-evasion measure that the government has introduced and it is important that the platform provided to businesses is robust to provide hassle free compliance of the e-way bill process,” Sethi said.

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