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  India   All India  12 Jun 2017  GST Council reduces tax rates of 66 items including insulin, movie tickets

GST Council reduces tax rates of 66 items including insulin, movie tickets

THE ASIAN AGE. | PAWAN BALI
Published : Jun 12, 2017, 1:25 am IST
Updated : Jun 12, 2017, 1:25 am IST

Arun Jaitley said the reductions were done keeping in mind equivalence to the existing taxation level and change in utilisation behaviour.

Finance Minister Arun Jaitley
 Finance Minister Arun Jaitley

New Delhi: In a move that’ll bring cheer to some, the GST Council on Sunday reduced the tax rates on 66 items it had fixed earlier, making household items like pickle, ketchup, cutlery, agarbatti, kajal, school bags, children’s exercise and drawing books, and office necessities like printers cheaper.

On one specific item, movie tickets, the council decided on two tax slabs. Tickets costing Rs 100 or less will be taxed at 18 per cent, and those above Rs 100 will be taxed at 28 per cent. Earlier, the council had decided to tax all cinema tickets at 28 per cent, irrespective of the ticket price.

 

The revision of tax rates comes within weeks of the all-powerful GST Council slotting over 1,200 items into one of the four tax slabs — 5, 12, 18 and 28 per cent. The GST Council had received representations from various industry groups to reduce tax rates on 133 items that had been put under a higher tax category.    

In a relief to SMEs, the GST Council decided that small traders, manufacturers and restaurant owners with a turnover of up to Rs 75 lakh can opt for a composition scheme against the earlier limit of Rs 50 lakh. Under the composition scheme, traders need to pay just one per cent, manufacturers two per cent and restaurants five per cent of overall income as tax and not GST rates. Traders with an annual income of Rs 20 lakh or less are exempt from GST.

 

Finance minister Arun Jaitley said the reductions were done keeping in mind equivalence to the existing taxation level and change in utilisation behaviour.

“In some cases, the fitment committee’s recommendation went beyond the equivalence principle because some items, which have been historically charged at a higher rate, but, in today’s changed economic scenario, the burden requires to be reduced. So, after considering the recommendations, the GST Council has reduced the tax levels in 66 out of 133 cases,” he said.

GST Council decided to revise downwards tax rate on food items like pickles, mustard sauce, ketchup, chutney, morabba, instant food mixes, toppings and spread-over sauces from the proposed 18 per cent to 12 per cent.

 

Tax rate on cashew nuts has been cut to five per cent from the proposed 12 per cent. “Many of these items are used by common people,” Mr Jaitley said. As far as healthcare is considered, the GST Council reduced proposed tax on insulin used by diabetic patients to five per cent from the earlier 12 per cent, and on dental wax from 28 to 18 per cent.

Parents can also breathe a sigh of relief as the council cut tax on school bags from 28 to 18 per cent, on exercise books from 18 to 12 per cent and colouring and drawing books from 12 per cent to nil. Tax rate on agarbatti was revised from 12 to five per cent, kajal from 28 to 18 per cent, cutlery from 18 to 12 per cent and computer printers from 28 to 18 per cent. For workers who take work home, in sectors like textile, jewellery, diamond processing, leather, jewellery and printing, GST rates have been brought down from 18 to five per cent.

 

The GST Council will again meet next Sunday to look at any pending issue and fix the tax rate on lottery. However, in a setback for telecom industry GST Council didn’t entertain their request to reduce GST rate from the present 18 per cent.

“The deferment of discussions to next Sunday around e-way bills is of concern to industry, as it would indeed be a tall task for industry to be prepared as on July 1st, if the same were to be made fully applicable on the start date,” Mahesh Jaising, partner (indirect tax), BMR & Associates, said.

Tags: arun jaitley, gst council
Location: India, Delhi, New Delhi