JOIN USMoving swiftly ahead of the parliamentary elections, the GST Council on Saturday brought down rates on a number of goods of common man’s use, heavily pruning the highest tax slab of 28%. It also announced the easing of the process of filing returns and claiming refunds.
The goods on which the rates were slashed included TV screens, wheelchairs, video games, power banks and small sports accessories. Rates were cut on 23 commonly used goods and services with a revenue implication of Rs 5,500 crore a year but Finance Minister Arun Jaitley said that this would not increase the Centre’s fiscal deficit.
The services, which saw a reduction in GST rates were cinema tickets, religious pilgrimage, services supplied by banks to savings and Jan Dhan accounts. GST on cinema tickets less than Rs 100 was reduced to 12% from 18%, for tickets above than Rs 100, GST was reduced to 18% from 28%. The new tax rates will come into effect from January 1.
With Saturday’s exercise, the highest 28% tax slab, which consisted of 226 items when GST was introduced in July 2017, was reduced to just 28. As many as 61 items were removed from the highest tax bracket on Saturday.
Jaitley said the only item of common man’s use in the 28% slab was cement on which the Council in its next meeting in January will take a call. He said cutting rates on cement would have led to a revenue loss of Rs 13,000 crore.
“The 28% bracket is gradually moving to sunset... The next target will be rate rationalisation in cement as and when affordability improves. Now, the 28% slab is restricted to only luxury and sin goods, apart from auto parts and cement,” the finance minister said.