Finance Minister Arun Jaitley on Monday hinted at a single standard GST rate for the country going forward, instead of five slabs at present. He also signalled a GST rate cut on cement in the next GST Council meeting in January.
Like cinema tickets, the government has got a fairly large representation from real estate industry seeking to bring down 18% GST rates on cement to 12%. But the move culd not be taken in the Saturday's meeting as the government was losing a whopping Rs 13,000 crore of revenues.
In his Facebook post on Monday on 18 months of GST, he said the government was preparing to give relief to service tax assessees under GST on the lines of that of goods.
“A future road map could well be to work towards a single standard rate instead of two standard rates of 12% and 18%. It could be a rate at some mid-point between the two...
“Obviously, this will take some reasonable time when the tax will rise significantly. The country should eventually have a GST which will have only slabs of zero, 5% and standard rate with luxury and sin goods as an exception,” Jaitley said.
At present, there are five slabs under GST – 0%, 5%, 12%, 18% and 28%. At least 183 goods are taxed at zero rate, 308 at 5%, 178 at 12% and 517 at 18%.
“The 28% slab is now a dying slab,” Jaitley said after the GST Council in its last meeting offloaded a number of goods from the highest slab leaving it with only about 30.
“Assessees upto Rs.1 crore turnover can get a composition by paying 1% tax. The composition scheme for small service tax assessees is under consideration,” Jaitley said.
“Restaurants are being levied a tax compounded under the composition of turnover at 5%. Assessees with turnover upto Rs.20 lakhs are exempted from tax payment. Cinema tickets tax between 35% to 110% has been brought down to 12% and 18%. The GST has helped in controlling inflation. Evasion has also come down, the finance minister said.
“Our next priority will be to transfer cement into a lower slab. All other building materials have already been transferred from 28% to 18% and 12%,” Jaitley said.