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GST Council lowers rates on 66 items, relief to SMEs
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SME Times News Bureau | 12 Jun, 2017
The Goods and Services Tax (GST) Council at its 16th meeting in New Delhi on
Sunday revised the rates of 66 items out of the 133 for which
representations had been received seeking change from the fitments
originally made in the four-slab indirect tax structure, Union Finance
Minister Arun Jaitley said. Industry hailed the GST Council's latest
decisions as beneficial, particularly for small and medium enterprises (SME).
Following
the 15th meeting of the council here earlier this month, held to decide
on the six remaining items -- including gold and beedi -- from the
Srinagar meeting which had decided upon 1,211 items, Jaitley had said
that a committee of officers would examine rate adjustments, if any,
based on the representations received from different trade and industry
associations. Their recommendations were taken up by the council on
Sunday.
"The 133 representations received were considered at
length and the officers' committee made their recommendations... the
council has reduced tax in 66 out of the 133 cases," Jaitley, who heads
the council, told reporters here following the meeting.
The Minister explained that the cases for reduction had been considered keeping two objectives in mind.
"One
was to maintain equivalence to the existing taxes, and in some other
cases the fitment had breached this equivalence principle. In others,
the reduction is required because of the changing nature of the economy
and changes that have occurred in consumer preference," he said.
Elaborating
on some of the reductions, Jaitley said the tax on cashew has been cut
from 12 to 5 per cent. Packaged foods like food and vegetable products
such as pickles, chutnies, ketchup and instant food mixes, among others,
which historically were taxed at 18 per cent, are going to be taxed at
12 per cent as these are items used by common people, he said.
Tax
on cutlery will come down from 18 to 12 per cent, while computer
printers will be lowered from 28 to 18 per cent. Insulin and agarbatti
will go down from 12 to 5 per cent.
Among other goods, Jaitley
said school bags have been lowered from 28 to 18 per cent, while
exercise books will come down from 18 to 12 per cent.
All goods
and services under the pan-India GST regime, which will subsume the
existing multiple central and state levies, have been categorised in
four tax slabs of 5, 12, 18 and 28 per cent, besides those items that
attract zero tax.
On Entertainment Tax, Jaitley said that
following representations from the film industry, the GST Council has
decided on a two-slab structure for cinema tickets, whereby those
costing less than Rs 100 would be taxed less at 18 per cent, while those
above will attract tax of 28 per cent.
In order to encourage
job work outsourcing in sectors like diamond, leather, textiles,
jewellery and printing, where workers take the work home, the GST rate
has been reduced to 5 per cent.
Besides, traders, manufacturers
and restaurants with turnover of up to Rs 75 lakh can avail themselves
of the composition scheme, against Rs 50 lakh earlier, Jaitley said.
He
also said that lottery tickets and e-way bill are two specific issues
that will be taken up at the next meeting of the council here on June
18.
While BJP-ruled states gave a go ahead to July 1 roll-out of
the GST, West Bengal Finance Minister Amit Mitra continued to raise
serious doubts over the feasibility of the new indirect tax regime and
proposed its postponement by a month or so.
"I have also added a
caveat (in the GST Council meeting) that July 1 looks extremely
difficult. But you cannot do frugal innovation for world's largest
fiscal reform called GST. And you are going to start GST from July 1. So
my submission was, let us not do frugal innovation for something which
is world's largest fiscal reform," Mitra told reporters after the
meeting here.
He said that there is no harm in postponement of the GST "by one month or so".
Union
Finance Minister Arun Jaitley reiterated that the traders and industry
had no option but to get ready by July 1 as no postponement was on the
anvil.
"Irrespective of the date at which is to start, some
people will say we are not ready. They have no option but to get ready.
You require honest intent for that," he told reporters when asked about
some industry representatives seeking more time for the roll-out.
Industry
and stakeholders on Sunday hailed the GST Council's move of bringing
traders, manufacturers and restaurants below Rs 75 lakh turnover under
the Composition Scheme saying that it will boost small and medium
enterprises in the country. "This is a big decision in favour of
traders. Its a people -centric decision, will benefit for the common
people. The biggest win is for SMEs today. Biggest development for small
and medium enterprises (SMEs) and small businesses that contribute on a
large scale to the GDP and job sector of the country," the West Bengal
Finance Minister said. "The purpose of GST is to protect SMEs,
protect states' revenues and benefit people. By stimulating SMEs, which
are labour intensive, taxes will go up, impact on GDP will go up and if
implemented in appropriate manner, it can lead to greater revenues,"
Mitra said. Traders who have below Rs 75 lakh turnover will have
to pay 1 per cent tax, manufacturers will have to pay 2 per cent while
restaurant businesses will have to pay 5 per cent if they opt to go for
the Composition Scheme under GST. Pratik Jain, Partner and
Leader Indirect Tax, PwC, said: "Increasing the composition scheme limit
to Rs 75 lakh from Rs 50 lakh will provide relief to many more small
businesses, though service providers (except restaurants) continue to
remain outside the ambit of composition levy." Mahesh Jaising,
Partner, Indirect Tax, BMR and Associates LLP said: "The GST Council has
decided to increase the threshold of the composition scheme. This
should mean that a significant number of SME sector players should
benefit from not having to meet with detailed compliances under GST and
also having a less financial burden, on account of GST."
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GST
Poonam Chouhan | Thu Jun 15 06:38:08 2017
Good information but should be more elementory
GST
N K Mishra | Thu Jun 15 01:01:02 2017
It is very surprising to note that the Indian economy we are taxing- school bags, stationary, books , medicines, herbal and natural extracts. I don't understand the game plan behind this. But, I feel country is heading for serious crisis with GST. Introduction. One thing is certain that now rest of my life I will vote for NOTA.
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