Cars, Common Use Items On GST Council Radar Today: 10 Things To Watch Out For

The GST Council, chaired by Finance Minister Arun Jaitley, will look into tax anomalies on numerous common use items in Hyderbad today. The council, which also includes state finance ministers, will also decide on the quantum of cess to be hiked on luxury and mid-sized cars. Here are the 10 key things to watch out for in today’s meet:

1. The 21st meeting of the GST Council is likely to consider lowering tax rates on over two dozen products, including idli/dosa batter, dried tamarind, custard powder and kitchen gas lighters after anomalies in their fixations were pointed out, officials said.

2. The Council will also formulate a mechanism to deal with businesses that are deregistering their brands to avoid taxes after the rollout of the uniform code adopted by the nation in July. The fitment committee has proposed to the GST Council to consider May 15, 2017, as the cut off date for considering a brand as registered for the purpose of levy of GST, irrespective of whether or not the brand is subsequently deregistered.

3. Unbranded food items are exempted from GST, whereas branded and packaged food items attract 5 per cent rate. Hence, many businesses are deregistering their brands to avoid the levy.

4. The quantum of hike in cess on a range of cars from mid-sized to hybrid variants would also be finalised in the meeting. The Council had in its last meeting on August 5 approved a hike in cess on mid- and large-sized cars, SUVs, hybrid and luxury ones to up to 25 per cent, from 15 per cent. An rdinance to hike the cess rate has been promulgated and the Council will now look at the quantum of hike.

5. Even as auto makers continued to demand deferral in the cess hike, the Council is likely to go ahead in increasing it as it will rectify the anomaly rates of certain common use items had gone up but luxury cars were under the regime. Car prices had dropped by up to Rs. 3 lakh following the implementation of GST from July 1.

6. Also a new category has been introduced in the Act wherein motor vehicles which have capacity to transport up to 13 persons would attract 25 per cent cess. The highest pre-GST tax incidence on motor vehicles worked out to about 52-54.72 per cent, to which 2.5 per cent was added on account of Central Sales Tax and octroi. Against this, post-GST the total tax incidence came to 43 per cent.

7. Under GST, which replaced over a dozen central and state levies in the biggest tax reform since independence, cars attract the top tax rate of 28 per cent. On top of this, a cess of 1 to 25 per cent has been levied for the creation of a corpus to compensate states for any loss of revenue from implementation of GST.

8. The states are likely to gauge how technology helped GST Networks (GSTN) and how the maiden return filing fared. Due to huge rush for GSTR-3B return filing on the penultimate date in July, the GSTN software had witnessed some glitches and the last date of filing had to be extended.

9. Also the date of final return filing for GSTR-1 was extended to September 10 in view of rush in invoice uploading.

10. Various issues flagged by traders and businesses are likely to be raised by the states in the meeting, an official said. (With PTI Inputs)
source:http://www.ndtv.com/business/cars-common-use-items-on-gst-council-radar-tomorrow-10-things-to-watch-out-for-1747897