More than 200 items may get cheaper as GST Council is likely to announce big tax cut

Weeks after Revenue Secretary Hasmukh Adhia called for a complete overhaul of the tax rates, it has been reported that the GST Council is likely to cut taxes on 80 per cent items of the highest 28 per cent tax slab. The Council is scheduled to meet tomorrow (Friday) in Guwahati, Assam. Bihar Deputy Chief Minister and GST member Sushil Kumar Modi on Wednesday said that out of 227 items falling in highest tax slab is likely to be reduced from 28 per cent to 18 per cent in the upcoming Council meet. “The GST fitment committee has also recommended reducing tax rates from 18 per cent to 12 per cent on a number of goods,” Modi said.
Sushil Modi is not the only person to suggest the possible tax cut. Finance Minister Arun Jaitley had also hinted at bringing down the number of products in 28 per cent GST slab. While speaking at India Today Conclave earlier this week, the Finance Minister said that some of the items should never have been in the 28 per cent slab. “We have been gradually bringing them down. The whole idea is, as your revenue collections neutralise we must prune it and that is the pattern in which the Council has so far been functioning. I see that as a future guide as far as the Council is concerned,” Jaitley had said.
The GST Council in the last 3-4 meetings has slashed rates on over 100 items. According to the reports, the Council may slash taxes on certain common use items such as handmade furniture, plastic products and daily use items like shampoo. There have been demands for lowering tax on wooden furniture as it is mostly handmade by unorganised sector artisans, with the middle class as the primary consumers. Other items in the same tax basket include shower baths, sinks, wash basins, bidets, lavatory pans, seats and covers, flushing cisterns and similar sanitary ware of plastics.

Earlier in October, Revenue Secretary Hasmukh Adhia had advocated for a complete overhaul of the tax rates under the GST regime. In an interview to PTI, Revenue Secretary said: “There is a complete overhauling that is required. It is possible that some items in the same chapter are divided. There is a need for harmonisation of items chapter wise and wherever we find there is a big burden on small and medium businesses and on common man, if we bring them down, there will be a better compliance.” He, however, said the overhauling would require some calculations by the fitment committee, which will decide which items need a rationalisation of rate under the GST.
Apart from bringing down the taxes, the GST Council may also take call on incentivising digital transactions for both customers and traders to boost digital payments in the country. The GST Council is also working on making return filing smoother for traders and it is expected that in next Council meet the GoM may recommend filing of only the summary return form – GSTR3B. Currently, traders have to file returns in GSTR1, GSTR2 and GSTR3 along with one annual return.
Ever since the new tax regime came into being, the GST Council has reworked various provisions to make it more industry friendly. The turnover threshold for composition scheme, under which businesses can pay taxes at a nominal rate, has been hiked to Rs 1 crore, from Rs 75 lakh earlier.

source:http://www.businesstoday.in/current/economy-politics/gst-council-meet-tax-cut-sushil-modi-gstn-gstr3b-arun-jaitley/story/263582.html

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