GST Rate On Over 70 Items Expected To Be Cut In Today’s GST Council Meeting
January 18th, 2018
The Goods and Services Tax (GST) Council will meet for the 25th time today to implement further changes and improve the most comprehensive indirect tax regime in India since her independence.
The Council may take up revision of GST rates on a number of times, some of which are:
Bio-diesel : 18%
Agri equipment : 12%
Electric vehicle : 12%
Online services : 18%
Jobwork service for handicraft : 12 %
Some other services : 18%
70-80 goods and services are expected to go under the knife.
The 25th meeting of the Council comes amid hushed GST revenue collection. The government collected Rs 80,808 crores in GST revenues in November, a steep decline from Rs 94,063 crore that was collected in July. In October GST collections were Rs 83,346, which was still lower than the Rs 91,000 crore per month target. While rate cuts could augur well for certain sector of the industry, according to experts this may impact government’s revenue position. “A rate cut may further put strain on the government’s ability to adjust expenditure,” Prashant Deshpande, Partner, Deloitte India said, reported Money Control.
At the backdrop of GST is the Indian government’s current fiscal deficit, which is the after 2008-09, the year of global financial crisis.
In November, the Council had decided to cut rates of more than 200 items, a move which is expected have a revenue implication of Rs 20,000 crore annually.
Real estate in GST:
The Council is expected to discuss the inclusion of real estate in GST and also announce a roll out date for the same (could be the start of the new financial year, April 1). As per The Economic Times, some reports suggest there will be 12% GST for the sector and the Council may also decide to subsume stamp duty and registration charges in the new tax regime.
Changes in law:
The Council will consider as many as 70 changes on the recommendation of the law review committee. Some of these changes, when approved, may need amendment in the GST related laws, a government official said, reported by Money Control.
- Change to definition of supply
- A more liberal input tax credit regime
- Reverse charge mechanism simplification
- Single registration for large services providers, with a turnover of more than Rs 5 crore and present in 10 states or more
GST Council may approve a new definition for handicrafts to give a leg up to the sector. Handmade paper, handmade envelopes, letter cards, postcards, handmade boxes, pouches, wallets, handmade agarbattis, handmade fabric to be designated as handicrafts.
Simplifying filing for GST return
The Council may allow a single state return filing to reduce the compliance burden and ease procedures for small and medium businesses. Another reform expected to take place is the merger of GSTR 1, 2 and 3 forms into one consolidated form which would mean that companies will have to file 12 returns a year instead of 37 returns.
“Businesses will still have to file GSTR3B (summary form) for the next six-months, till the time the new simplified and single return form becomes a reality,” a senior government official said, reported Money Control.
In the last GST Council meeting in December, roll-out of e-way bill on February 1 was announced. This meant that transporters will not need separate transit passes for moving goods from one state to the other. The e-way bill issued will be valid throughout the country.