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  India   All India  23 Dec 2018  GST Council cuts rates on 23 items; movie tickets, TVs to become cheaper

GST Council cuts rates on 23 items; movie tickets, TVs to become cheaper

THE ASIAN AGE. | PAWAN BALI
Published : Dec 23, 2018, 6:04 am IST
Updated : Dec 23, 2018, 6:04 am IST

The new GST rates, the government said in a statement, will take effect from January 1, 2019.

Finance Minister Arun Jaitley (Photo: ANI | Twitter)
 Finance Minister Arun Jaitley (Photo: ANI | Twitter)

New Delhi: Four days after Prime Minister Narendra Modi hinted that “99 per cent items from the GST’s top slab of 28 per cent” would attract less tax, the government on Saturday announced that it was taking seven items out of the highest tax bracket. It also cut taxes on popular items such as movie tickets and air travel of pilgrims by non-scheduled/charter operations.

While six items, including monitors and TVs up to 32 inches, digital cameras and video game consoles, will now attract 18 per cent tax instead of the earlier 28 per cent, on one item — parts and accessories for carriages for people with disabilities — just 5 per cent tax will be levied.

 

In all, the GST Council, headed by finance minister Arun Jaitley, on Saturday slashed rates on 17 goods and six services. The new GST rates, the government said in a statement, will take effect from January 1, 2019.

The revised tax rates will result in a revenue loss of Rs 5,500 crore to the exchequer. Now only 28 goods are left in the highest 28 per cent tax bracket.

Mr Jaitley said that tax on cement and auto parts was not reduced from the current 28 per cent as it would have an impact of Rs 33,000 crore on revenue.

“The council felt it (revenue) is too steep at the moment,” said Mr Jaitley. Besides cement, auto parts, airconditioners and dishwashers, only luxury and sin items are now in the highest 28 per cent tax bracket. “The next target will be rate rationalisation in cement as and when affordability improves,” Mr Jaitley said.

 

The Council’s announcement that GST on movie tickets up to Rs 100 will be cut to 12 per cent from 18 per cent, and tickets over Rs 100 will attract 18 per cent GST against 28 per cent earlier, is bound to bring cheers to the common man.

The cut in GST on mass entertainment will have annual revenue implication of Rs 900 crore.

GST on walking sticks was reduced from 12 to 5 per cent, and GST was altogether removed on music books. Services supplied by banks to basic savings bank account and Jan Dhan accounts will now also be exempt from GST.

GST rate on third party insurance premium of goods carrying vehicles will be reduced from 18 per cent to 12 per cent.

 

Air travel of pilgrims by non-scheduled/charter operations for religious pilgrimage facilitated by the government will attract the same rate of GST as applicable to similar flights in economy class (five per cent). It currently attracts 18 per cent GST.

Mr Modi had said on Tuesday that his government wants to ensure that 99 per cent items in the top tax bracket are moved to the 18 per cent slab, or less.

The GST Council on Saturday also approved the proposal to form a “seven member Group of Ministers” to analyse the reasons affecting revenue collection in some states. Taxpayers who have not filed returns for two consecutive tax periods shall be restricted from generating e-way bills, it was decided. And a new return filing system will be introduced on a trial basis from April 1, 2019, and on mandatory basis from July 2019.

 

The GST Council, in its next meeting in January, will consider rationalisation of tax rates on residential properties and raising the threshold exemption limit for MSMEs from the current Rs 20 lakh. It will also consider a composition scheme for small suppliers, a calamity cess and tax rates on the lottery.

Tags: narendra modi, gst rate, arun jaitley
Location: India, Delhi, New Delhi