In a relief to the common man, the GST Council headed bu financeminister Arin Jaitley Saturday cut rates on 23 commonly used goods and services, including , third part motor ionsurance ,TV screens, movie tickets and power banks.
The new tax rates will come into effect from January 1, 2019.
The annual revenue implication of the rate cuts would be Rs 55 billion, Jaitley
GST on mandatory third party insurance has been brought down to 12 per cent.from 18 per cent while services supplied by banks to basic savings accounts, PMJDY have been completely exempted from GST.
There were around 226 goods in the 28 per cent category when Goods and Services Tax (GST) was implemented on July 1, 2017.
On December 18, Prime Minister Narendra Modi had announced the government is aiming to bring 99 per cent of items below the 18 per cent GST slab and warned of stringent action against defaulters of bank loan and fugitives
The Prime Minister's Office (PMO) had earlier asked the finance ministry (Department of Financial Services) to look into the issue and "prepare a proposal that can be placed before the GST council".
Commercial vehicle owners have been asking for a rate cut as the mandatory tax makes the vehicles expensive. They believe that a reduction in tax rate will also help increase the insurance cover, which at present is only 50 percent of all vehicles.
"Since it serves a greater social cause and has a large impact, we are still hopeful that the government will do away with the GST. This will bring down the premium of a big truck by Rs 5,000-7,000 on an average and will bring some relief,” Bal Malkit Singh of All India Motor Transport Congress
The GST council rationalised the 28 per cent slab by bringing down the tax rate on seven items in the highest tax bracket, thereby leaving only 28 items in the slab.
Finance Minister Arun Jaitley on Saturday said that six items have been removed from the 28 per cent tax bracket under the Goods and Services Tax (GST) regime.
There were 34 items in the 28 per cent tax bracket which included luxury and 'sin goods' till now. However, the GST Council in its meeting on Saturday decided to take out 6 items from this list.
Briefing reporters after the 31st GST Council meeting here, Jaitley said rate rationalisation is an ongoing process.
"28 per cent bracket is gradually moving to sunset… The next target will be rate rationalisation in cement as and when affordability improves," he said.
Now, the 28 per cent slab is restricted to only luxury and sin goods, apart from auto parts and cement — tax rates on which could not be cut due to the high revenue implication.
Other Key takeaways:
GST on movie tickets costing up to Rs 100 was cut to 12 per cent from 18 per cent, while tickets over Rs 100 will attract 18 per cent tax, against 28 per cent earlier. This will have a revenue implication of Rs 9 billion.
Monitors and TV screens up to 32-inches and power banks will attract 18 per cent GST, as against 28 per cent earlier.Key takeaways:
GST Council agrees to set up Centralized Advance Ruling Authority
GST on movie tickets costing up to Rs 100 cut to 12 pc from 18 pc; tickets over Rs 100 to attract 18 pc GST, against 28 pc earlier
New GST return filing system to come into effect from July 1, 2019