GST Rates Reduced For 82 Items; Govt.’s Pre-Budget Gift For Businesses?
GST Council has announced cuts in GST rates of 29 goods and 53 services and has made the GST filing process easier.
On 17th January, we had predicted that some Big Bang GST reforms can be announced days before the Union Budget is presented on 1st February.
Our predictions have come true, as the GST Council has recommended some major changes related to GST rates, and also proposed to streamline the process of filing GST returns.
These proposals have been announced after the 25th meeting of the Goods and Services Tax (GST) Council, headed by Finance Minister Arun Jaitley.
The final call and rollout of these changes shall be announced in their next meeting, which will be covered by video conference.
Finance Minister Arun Jaitley said, “Today it was discussed but not finally approved. But it is moving in that direction,”
GST Rates Reduced For 82 Items!
GST Rates for 29 goods and 53 services have been reduced, as per the fresh proposal sent by the GST Council.
Good news for automobile owners and businesses, as the GST slab for old and new automobiles, have been reduced from 28% to 12%.
However, it is based on the ‘condition that no input tax credit of central excise duty/value-added tax or GST paid on such vehicles has been availed by him.’
These are goods, whose GST rates have been reduced from 18% to 12%:
- Sugar boiled confectionary
- Drinking water packed in 20 litters bottles
- Fertilizer grade Phosphoric acid
- Bamboo wood building joinery
- Drip irrigation system including laterals, sprinklers
- Mechanical Sprayer
These are the goods whose GST rates have been reduced from 18% to 5%:
- Tamarind Kernel Powder
- Mehendi paste in cones
- LPG supplied for supply to household domestic consumers by private LPG distributors
- Scientific and technical instruments, apparatus, equipment, accessories, parts, components, spares, tools, mockups and modules, raw material and consumables required for launch vehicles and satellites and payloads.
These are the goods for which GST rates have been reduced from 12% to 5%:
- Articles of straw, of esparto or of other plaiting materials; basket-ware and wickerwork
- Velvet fibre
These are the goods for which GST rates have been reduced to zero:
- Parts and accessories for the manufacture of hearing aids.
- De-oiled rice bran
For diamonds, GST has been reduced to 0.25% from 3%
However, for some items, GST has been increased as well.
For Cigarette filter rods, GST has been increased from 12% to 18%; and for Rice bran (other than de-oiled rice bran), GST has been increased from zero to 5%.
Within services, whose exact details are still not out, some interesting GST reductions have been proposed.
GST has proposed to be reduced for services such as Legal assistance provided to the government and its agencies, admission to theme parks and small housekeeping services provided by e-commerce firms such as UrbanClap.
As per experts, Govt. will incur losses up to Rs 1200 crores on these tax rate cuts.
GST Filings Simplified
Besides, the entire process of GST filing has also been proposed to be simplified, and seamless.
As we had reported earlier, GSTR 2 which deals with purchases, and GSTR 3, which deals with comprehensive return can be abolished; and only GSTR 3B will remain.
Now, GSTR 3B is crucial, because it will be combined with the invoice details which is uploaded by suppliers on the GST portal.
Hence, a mechanism to stop tax evasion, along with simplifying the whole process has been planned.
Minister Jaitley said, “Initially there will be GSTR 3B return and then suppliers’ invoices, which will be adequate. This will be a simple process,”
We will keep you updated as details come in.. Expect some more fireworks are expected before 1st February!