Sunday’s revision gives certainty to businesses about the tax burden on individual items under GST well ahead of the 1 July rollout
New Delhi: Commonly used items like salt, sauces, spoons and forks as well as some engineering goods and construction material are among the products on which the proposed goods and services tax (GST) rates were lowered by the GST Council at its meeting on Sunday, according to the revised schedule of tax rates released by the government late on Sunday night.
Sunday’s revision, which finance minister Arun Jaitley described at a briefing as “broadly the final rates”, gives certainty to businesses about the tax burden on individual items well ahead of the 1 July rollout of the new indirect tax regime.
Historically, indirect tax changes in the Union budget come into force immediately, even before the Finance Bill is passed, unlike income tax rates that are specific to financial years.
With the finalization of GST rates, the framework of the unified indirect tax system is more or less ready for the rollout, although a few rules and processes not required in the first month of rollout still need to be finalized. These include rules on advance ruling and enforcement-related issues, according to an official in the Council, who spoke on the condition of anonymity. Advance ruling facility allows taxpayers to get an idea of the tax liability of a transaction in advance. Enforcement rules will deal with provisions for search and arrest.
The Council, which decided to raise the ceiling of the composition scheme, a presumptive tax payment system to ease compliance burden for small businesses and restaurants, from Rs50 lakh to Rs75 lakh annual turnover, is yet to decide whether this revised ceiling is applicable to special category states such as north eastern and other hill states. Under the scheme, eligible traders, manufacturers and restaurants can pay 1-5% GST rate on their annual sales without tax credits.
A note on the composition scheme uploaded on the website of the Central Board of Excise and Customs (CBEC) said that the GST Council will decide at its next meeting on 18 June whether the revised turnover limit will apply to special category states or not.
As per Sunday’s GST rate revision, salt has been exempted from indirect tax. The earlier rate, as per the schedule drawn up by the Council at its Srinagar meeting on 18-19 May, was 5%. Similarly, ketchup and sauces will attract 12%, against the 18% fixed earlier and coir mats and floor covers will attract 5% compared to 12% earlier.
Spoons, forks and ladles will attract 12% GST, against the 18% fixed earlier. Electrical transformers, CCTV, TV set top boxes and bamboo furniture will attract only 18% compared to 28% fixed last month. Make-up item kajal, which was earlier kept in the 28% slab, has been exempt from tax, although kajal pencil sticks will attract 18%.
[Copyright By PTI]