GST Council Removes 177 items From 28% Slab; Accepts Rs 20,000 Cr Loss!
There was tremendous hue and cry when some common use products were being charged 28% GST
As we had reported earlier, there was tremendous hue and cry over the highest slab of GST regime, wherein some common use products were bringing charged a draconian slab of 28% GST.
The powerful GST Council met today in Guwahati, and have announced that 177 items have been removed from the highest slab.
Earlier there were 227 items placed in the 28% slab, which has been now reduced to just 50.
This was announced by Bihar Finance Minister Sushil Modi, who was present in the meeting which was pressured by Finance Minister Arun Jaitley.
“So, today the GST Council took a historic decision, that in the 28% slab there will be only 50 items and the remaining items have been brought down to 18%.”
This is indeed a big step, as this will bring in huge relief for the common man, and will help to reduce expenses.
This reduction in items from the top slab will result in loss of Rs 20,000 crore for the Govt., as the items which have been removed are mostly fast moving consumer goods.
Some analysts are even saying that this reduction in items from the 28% slab was mainly done to appease voters in Gujarat, as assembly elections are shortly due there.
Which Items Have Been Exempted From High Tax?
Common use products such as shampoo, chocolates, beauty products, construction items such as marble, granite have now been placed in 18% slab, which were earlier in the 28% slab.
Some other products which will now cost less due to reduction in tax slab include chewing gum, deodorant, shoe polish, soaps, washing powder, nutritional drinks and even cosmetic products.
Which Items Will Be Under 28% Tax Bracket?
Mainly luxury and Sin Products would be placed in the highest tax bracket, as per the outcome of today’s meeting.
Luxury cars, cigarettes, cement, are included in this, and would attract 28% tax. Besides washing machines, air-conditioners, paint, cold drinks, pan masala are also placed in the highest tax bracket now.
As per the minister, out of 50 items placed in the 28% tax bracket, several more will be gradually converted into 18% tax bracket albeit gradually as the impact on tax revenue is much more.
At the time of writing, the meeting was still under progress, and decision on keeping 12% tax for AC restaurants would be also taken, besides simplifying the tax return filing process.
We will keep this blog updated as we receive more information.