Be Ready for 2% More GST Rate As Per Fitment Committee Proposal

The tough struggle upcoming for GST council for taking a reformative decision is that it can prepare for GST rate rationalization by the means of fitment community nominated by a GoM on the GST rate of rationalization to acknowledge the increase in the slab of 5% to 7% and 18% to 20%.

“The group of ministers shall indeed find out the “feasibility of merging 12 per cent and 18 per cent to one single slab at 17 per cent, hiking compensation tax rate to be raised from 1 per cent to 1.5 per cent and increasing the taxes on precious metal (gold/silver) from 3 per cent to 5 per cent,”

Group of minister (GoM) upon the rate rationalization formerly met 2 times and a final meet is decided to discuss to conduct on 27th November to discuss the rate slabs and the structure of the cost. It revealed that the group of ministers on the rate rationalization post acknowledging the offering shall make the draft report that shall be furnished towards the group of ministers and the report shall be submitted a post to the confirmation of the report to GST official intending the formal consideration.

The GoM is led by Karnataka chief minister Basavaraj S. Bommai. There are 7 members which consist of the GST council finance minister West Bengal, Kerala finance minister K.N. Balagopal, members from Goa, Bihar, Uttar Pradesh, and Rajasthan. From the sources, it stated that the GST council seems to 46th meet in December. But a formal date and the notification is to come.

“The group of Minister seen that the items of public consumption and sensitive public perception is imp for careful considerations during rate rationalization exercise, GoM is also in favour of withdrawing exemptions and levying GST to avoid tax evasion and to continue exemptions only where it is necessary,”

“From the source, it revealed that GoM is clear that the timing of the implementation of rationalized rates requires careful consideration, also the call will be considered noting that two member states of the GOM are poll-bound – Goa and Uttar Pradesh, thus the decision has to be kept in mind the political repercussions of the proposal.”

“Group of ministers poses a view of reduction of 28 per cent rate to 18 per cent cannot commensurate price reduction, thus the purpose of rate rejig has to be fulfilled,”

Upon the objects taking place of GST, it mentioned that the rates of “Agri related items like tractors, Agri related machinery, Aggarbati/dhoop, Lantern/ petromax, Utensils, are unlikely to be tinkered,”

“The group of ministers urged to carryon the exemptions prolonging to Hearing aids and parts, slate/ slate pencil/ chalk, input services to educational institutes, Bread, Neera/toddy, storage and fumigation of Agri produce would also continue,”

Instead of the sector or the items in which the Group of ministers can provide the direction to eliminate the privilege and applicability of tax can be “coffee beans, not roasted to be taxed at 5 per cent under RCM (Reverse Charge Mechanism), unprocessed green leaves of tea to be taxed at 5 per cent under RCM, cheques, lose or in books to be taxed at 18 per cent,”

“GoM could also give a go-ahead to reduce exemption via a reduced rate of 5 per cent to goods related to petroleum/ coal bed methane to be revised to 12 per cent, to take away the exemption of reduced rate of 5 per cent on e-waste to be revised to 18 per cent,”

Towards the hotel industry to permit the tax theft the group of ministers can acknowledge availing the “exemption or the differential rate for less than Rs 1,000 per unit per day from Nil and could decide to levy a GST of 12 percent,”

GoM has another proposal to make the structure of the inverted duty correct in any case where it is creating losses for the domestic industry. The final approval by the GST council is yet pending and the Group of Ministers is not final.