In a major reshuffle under the Goods and Services Tax (GST), the council which met in Guwahati on 10th November 2017 reduced the tax slab of around 178 items which were in the 28% GST tax slab category and now put into 18% tax slab category.
Union Finance Minister Arun Jaitley said after the GST council meet, “Out of 228 items in 28 % tax bracket, 178 have been put into lower tax category of 18%.”
There were 227 items in the 28% slab category. The fitment committee had recommended that it should be pruned to 62 items. But the GST Council has further pruned to more items. Now, all types of chewing gum, chocolates, preparation for women cosmetics, shaving and after-shave items, deodorants, washing powder detergent and granite and marble have been put in the 18 per cent category.
“Only 50 items to face 28 per cent rate,” Bihar finance minister Sushil Modi told reporters during the GST council meet in Guwahati.Similarly tax rate on 13 items have reduced from 18 % to 12 %; on 5 items it has been cut to 5 % from 18 %; rate on 6 items lowered to zero from 5 %
- Paints and cement have been retained in the 28 per cent tax bracket.
- Luxury goods like washing machines and air conditioners have been retained at 28 per cent.
- The decision taken by the GST Council will have a revenue implication of Rs 20,000 crore annually.
- Composition Scheme threshold has been raised to Rs 2 crore.
- Hotels with rooms that have tariff above Rs 7,500 will attract GST at 18 per cent.
- No inter-state sales, input tax credit (ITC) will be allowed under composition scheme.
- Only 50 items, mostly demerit, sin and luxury goods will be in the top 28 per cent tax bracket.
- 18 per cent GST will be levied on chewing gums, chocolates, after shave, deodorant, washing power, detergent, marble.
- All restaurants in the country to be levied GST of 5%, no ITC benefit to any restaurant
- 13 items moved from 18% to 12%, 6 items from 18% to 5%, 8 items from 12% to 5%, 6 items from 5% to nil.