GST On 29 Items, 54 Services Cut

GST Council To Meet Tomorrow May Consider Reduction In GST Rates

GST Council To Meet Tomorrow May Consider Reduction In GST Rates

Previously Prakash Pant, Uttrakhand's finance minister who is also a member of GST Council, said the body has chose to reduce tax rates on 29 items to 0% and decision on tax rates on petroleum products still remains pending.

With the Union Budget just two weeks away, Finance Minister Arun Jaitley will also hold a pre budget meeting with the state finance ministers.

Now as per the anti-profiteering law set up by the GST Council entailed that any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit should have been passed on to the recipient by way of commensurate reduction in prices. The decline in tax collection will amplify the Centre's fiscal concerns ahead of the Union Budget, scheduled for February 1. The Returns Committee report to simplify the process of filing GST returns is also likely to be on the Council's agenda tomorrow.

Telangana State which saw its revenue growth rate impacted post GST went prepared to represent that the proposal to bring petroleum products under the new tax regime be deferred. But the Council announced revised rates on some items which were not significant, sources said. Also, all powerful GST Council has not finalized single form return under GST which was the main agenda of meeting.

The government is waiting for the e-way Bill to come into effect all over the country from February 1, for inter-state movement of goods.

GST rate on second-hand medium and large cars and SUVs is brought down from 28 per cent to 18 percent and on other old and used motor vehicles to 12 per cent. He said during July-September, 17 lakh registered dealers paid Rs 307 crore via the window, which pointed to an annual turnover of under Rs 20 lakh, the minimum requirement for registering under GST.

- To reduce GST to 12 per cent in respect of mining or exploration services of petroleum crude and natural gas and for drilling services in respect of the said goods.

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If the trend continues, it will have adverse implications on government spending and leave no room for the government to cut GST rates further in the near future.

"It appears that progress has been made on a few relatively complex areas such as simplification of return filing system, tweaking the composition scheme, introduction of reverse charge on certain transaction", said Priyajit Ghosh, Partner, Indirect Tax, KPMG in India. Finance Minister Arun Jaitley said these rates will be effective from January 2.

"GSTR3B will be continued, but sellers or suppliers will have to upload their invoices (separately via different form)", Jaitley's said.

The Indian diamond industry which had been talking of GST concessions, has a lot to cheer with the ministry recommending reduction of GST from 3% to 0.25% for diamonds and precious stones under the chapter 7102.

GST rates for a few agricultural products have also been reduced.

- To levy GST on the small housekeeping service providers, notified under section 9 (5) of GST Act, who provide housekeeping service through ECO, at five percent without ITC.

The GST Council clarified that services provided by senior doctors, consultants and technicians hired by the hospitals, whether employees or not, are healthcare services, which is exempt. Services by way of fumigation in a warehouse of agricultural produce has been exempted from GST.

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