Finally, GST council heard of many sectors which were requesting for some relief from the heavily loaded GST rates levied upon them. As earlier the situation was different due to the standardized slab rate structure and the benefits were struck due to the insane application of taxes with not legible reason. The GST Council in its recent meeting held on Sunday took some decisions for the modification of the rates and reviewing the structure of many products.
The council took decision for as many as 66 products and also made some modification in the composition scheme to make it more easier and convenient for the small traders, manufacturers and restaurants. Some of the items like Insulin, pickles, printers, agarbattis, school bags, and cashew nuts are from the list of those 66 products which has recently seen some changes.
A total of 133 items were discussed and reviewed on the basis of the presentation given by the industry concerned but on the other, the rates for telecom services, marbles, granite, spectacles etc were left with no changes as of now. Numerous industries were making requests to the council for some modifications after the rate decision.
The union finance minister Arun Jaitley explained that there were many products who tax rates were heavier than needed and the fitment committee tried to lower the burden as much as possible and crossed the limits of equalisation principle and made lower scenario than the average tax rate prevailing currently.
The finance minister stated that “There are certain items that were historically taxed at a higher rate, but the Council felt that the burden needed to be reduced.” And after the meeting, the head of the council cleared that the tax rates have been decided with all the wit and power and no more requests will be entertained. As he mentioned that, “These broadly are the final rates… Just because somebody raising an issue does not mean you have to grant it.”
The head also revealed that the automobile sector falsely represented some facts regarding the plea of hybrid card tax rates and lost for any benefits. But assured that, “If necessary, it will come up for discussion.” As the hybrid is now loaded with an extra GST rate from previous 30.3 percent to now 43 percent.
Coming to an important part, the GST council also extended annual turnover threshold of composition scheme for small traders, manufacturers and restaurants to 75 lakh as earlier decided 50 lakh.In the scheme, a flat rate of 1,2 and 5 percent is levied according to eh product and industry orientation with lesser procedural work.
A lot of items were considered in which insulin, cashew nuts and agarbattis have been taken down to 5 percent while the school bags, printers, and tractors will now attract 18 percent rates. And the Kitchen use items like pickles, mustard sauce, and murabba are now having 12 percent.
MS Mani of Deloitte Haskins and Sells said that “the reduction indicated many consumer items might see a price reduction or at least an equivalence of prices after the GST is introduced, This will erase fears of an inflationary spiral due to the GST and may see prices stabilizing and benefit consumers.”
Pratik Jain of PwC Indian also said that “There has been an attempt to address the inverted duty structure in a few cases like tractors and textiles by reducing the rates on parts and job work services.”
While the Tax Partner, EY, Uday Pimprikar, mentioned that, “The telecom sector’s ask of a lower tax rate was ignored by the GST Council. The 18 percent rate imposed on the sector would increase the tax incidence. It is now important that the government engages with the industry to provide certainty and support for a smooth transition into GST.”
