GST Council’s 31st meeting has taken some of the major decisions on the higher slab rate. The meeting deliberately made discussion on the items coming under the highest 28% GST slab rate.
GST Council had earlier hinted over the GST rate reduction on 28% slab rate and now made official statements regarding the much awaited GST rate reduction on the items coming under the 28% GST slab.
Read Also: Check Out All Final Decisions of GST Council’s 31st Meeting
From a long time, multiple issues were carried forward in the name of higher GST rates on common man items and this has given enough majority to the panel to do some rate revision.
It was observed that most of the items coming in the highest GST slab rate of 28% were targeting the common man items including the cement, the basic ingredient to build a house, which is again another synonym for the common man’s need.
List of Items Removed from 28%, 18% & 12% GST Slab
GST Rate Reduced from 28% to 18%
- TVs and Monitor screen of up to32 inches screen size
- Pulleys, transmission shafts, and cranks, gearboxes etc., falling under HS Code 8483
- Re-treaded or used pneumatic tires of rubber;
- Power banks having lithium ion batteries note that Lithium-ion batteries are currently at 18%
- Parts and accessories for the carriages for disabled persons
- Digital cameras and video camera recorders
GST Rate Reduced from 28% to 5%
- Parts and accessories for the carriages for the disabled person
GST Rate Reduction on Other Goods (18% to 12%)
- Cork roughly squared or debagged
- Articles of natural cork
- Agglomerated cork
GST Rate Reduction on Other Goods (18% to 5%)
- Marble rubble
GST Rate Reduction on Other Goods (12% to 5%)
- Natural Cork
- Walking Stick
- Fly ash Blocks
GST Rate Reduction on Other Goods (5% to 0%)
- Vegetables in the state of uncooked or cooked by steaming or boiling in water while being frozen, branded and are in a unit container
- Vegetable briefly preserved under the mixtures of sulfur dioxide gas, in brine, in sulfur water or in other preservative solutions but unsuitable in that state for immediate consumption.
GST on Solar Power Generating Plant and Other Renewable Energy Plants
- Prescription of GST rate of 5% on renewable energy devices & parts for their manufacture (biogas plant/solar power based devices, solar power generating system (SGPS) etc) [falling under chapter 84, 85 or 94 of the Tariff] or other equipment being used in such plants attracting GST.
- Clarification on certain items having 5% GST supplied along with construction services applicable to the solar power plants.
- For the clarification of all the cases having 70% of the gross value shall be deemed as the value of supply of the particular goods having 5% GST rate and the remaining portion (30%) of the aggregate value of such EPC contract shall be deemed as the value of supply of taxable service having standard GST rate.
GST Rate Reduction on Services
- Services by banks to Basic Saving Bank Deposit (BSBD) account holder coming under Pradhan Mantri Jan Dhan Yojana (PMJDY)
- Third party insurance premium of goods carrying vehicles down from 18% to 12%
- Exemption of services offered under Rehabilitation Council of India Act, 1992 at the medical establishments, educational institutions, rehabilitation centers formed by the Central Government / State Government or Union Territories or entity registered under section 12AA of the Income-tax Act by the rehabilitation professionals.
- Exemption of services offered to the Government departments/local authorities by the GTA registered for the deduction of tax under Section 51 excluded from the payment of tax under RCM
- Services offered by the Central or State Government or Union Territory Government given to the undertakings or PSUs in the manner of guaranteeing loans had from the particular financial institution extended up till the further guaranteeing of such loans had from the bank.
- Air travel facilitated by the Government of India for the pilgrims offered by the non-scheduled/charter operations for religious pilgrimage under the bilateral ties to attract the same GST rate as of economy class i.e. 5% with ITC claim.
“Rationalization
- Parliament and State legislatures shall be extended the same tax treatment with regard to
payment of tax under RCM (reverse charge mechanism)as available to Central and State Governments. - Security services (supply of security personnel) provided to a registered person, except
Government Departments which have taken registration for TDS and entities registered under composition scheme shall be put under RCM. - Services provided by unregistered Business Facilitator (BF) to a bank and agent of
Business correspondent (BC) toa BC shall be put under RCM.
Clarifications:
- Sprinkler system consisting of nozzles, lateral and other components would attract 12% GST rate under S.No. 195B of notification No. 1/2017-Central Tax (Rate) dated 28.6.2018
- Movement of Rigs, Tools & Spares and all goods on wheels on own account where such movement is not intended for further supply of such goods but for the provision of service does not involve a supply (e.g., movement of testing equipment etc.) and is not be liable to GST
- The goods with description Bagasse Board [whether plain or laminated] falling under Chapter 44 attract GST at the rate of 12%
- Concessional GST rate of 5% applies to the LPG supplied in bulk to an OMC by refiners/fractioners for bottling for further supply to household domestic consumers
- Manure of determination of the classification of vitamins, provitamins etc. as animal feed supplements
- Sattu or Chattua falling under HS code 1106 and attracts the applicable GST rate
- Polypropylene Woven and Non-Woven Bags and PP Woven and Non-Woven Bags laminated with BOPP falls under HS code 3923 and attract 18% GST rate
- 18% GST is applicable on wood logs including the wood in rough/log used for pulping.
- Turbo charger is classified under heading 8414 and attracts 18% GST and not 5% GST
- Fabric even if embroidered or has stitching of lace and tikki etc., and even if sold in three-piece fabric as ladies suit set, will be classifiable as fabric and would attract 5% GST
- Scope of concessional rate of 5% GST rate for specified equipment for waste to energy plant
- To clarify that with effect from 31st January 2018 degrees/ diploma awarded by IIMs under IIM Act, 2017 will be exempt from GST.
- To clarify that the services provided by IFC and ADB are exempt from GST in terms of provisions of IFC Act, 1958 and ADB Act, 1966.
- To clarify to West Bengal that services provided by Council/ Board of Primary/Secondary/ Higher Secondary Education for the conduct of examination to its students are exempt.
- To clarify that “printing of pictures” falls under service code “998386: Photographic and
videographic processing services” of the scheme of classification of services and attract GST @18% and not under “998912: Printing and reproduction services of recorded media, on a fee or contract asis” which attracts GST @12%. - To clarify that leasing of pumps and reservoirs by the OMCs to petrol pump dealers is a mixed supply and the Licence Fee Recovery (LFR) charged for the same shall be leviable to GST @ 28%,the rate applicable to pumps. Leasing of land and buildings along with equipment shall fall under heading 9972 (real estate services) and attract GST rate of 18%.
- To clarify that the incentives paid by RBI to Banks under “Currency Distribution and Exchange Scheme” (CDES) are taxable.
- To clarify under section 11(3) of the CGST Act, 2017 that scope of entry for multi-modal
transport with GST rate of 12% inserted w.e.f. date 26.07.2018, covers only transport of goods from a place in India to another place in India, that is, only domestic multi-modal transport. - To clarify that the nature of business establishment making the supply of food, drinks and
other articles for human consumption will not determine whether the supply by such establishments is a supply of goods or services. It will rather depend on the constituents of each individual supply and whether same satisfies the conditions/ingredients of a “composite supply” or “mixed supply”. - To clarify that GST is exempt on the supply of food and drinks by an educational institution
when provided by the institution itself to its students, faculty, and staff and is leviable to GST of 5% when provided by any other person based on a contractual arrangement with such institutions. - To clarify that the banking company is liable to pay GST on the entire value of service charge or fee charged to customers whether or not received via business facilitator or the business
correspondent. - To issue a clarification to Food Corporation of India (FCI) that the service provided by godown owner in case of the lease with services, where the godown owner, besides leasing the warehouse,
undertakes to carry out activities of storage and preservation of stored food grains, is the service
of storage and warehousing of agricultural produce and the same is exempt.
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