Comments
The Centre and States have come together to unveil an over ₹9,000-crore ‘package’ for middle-class consumers. The ‘package’ is a GST rate reduction for over 50 product categories which, in turn, will change the tax structure for over 100 goods including TV sets, fridges and washing machines.
The GST Council, which met here on Saturday, took a slew of measures: rate cuts, allowing 93 per cent of GST assesses to file returns on a quarterly basis, deferring the Reverse Charge Mechanism till September 30, and a simpler one-return mechanism.
The Centre aims to get ₹1-1.10 lakh crore a month from GST this fiscal. A senior Finance Ministry official estimated that the revenue loss due to yesterday’s rate-cut on 17 white-goods could go up to ₹8,000 crore annually, while on other products and services, the amount would be approximately ₹1,000 crore, taking the total loss to ₹9,000 crore. However, at a press meet on Saturday, Interim Finance Minister Piyush Goyal maintained that the revenue loss will be ‘nominal’.
“With simplification, there will be compliance buoyancy and the overall assessment will show that the revenue impact is marginal,” he said, adding the revenue foregone is for the good of consumers.
Sanitary napkins will be exempted from tax as will be rakhi and idols made of stone, marble and wood.
The levy on ethanol has been reduced to 5 per cent from 18 per cent and on footwear costing up to ₹1,000 to 5 per cent from 12 per cent. Earlier, the lower rate was applicable only on footwear below ₹500.
Other items that saw a rate reduction include kerosene stove (18 per cent to 12 per cent), paint and varnish (28 per cent to 18 per cent), scents/perfumes (28 per cent to 18 per cent), mixers and grinders (28 per cent to 18 per cent), water heaters (28 per cent to 18 per cent), handicraft products such as handbags and jewellery (18 per cent to 12 per cent) and handmade carpets, floor covering etc (12 per cent to 5 per cent). The new rates will be applicable from July 27.
“Every State wanted the rates on these items to be lowered so that middle-income households are benefited... It has also been decided that the GST Council will rise above revenue consideration and focus more on job creation and economic growth,” Goyal said.
There’s major relief as well for hotels and travellers, as the tax rate on “accommodation service shall be based on transaction value instead of declared tariff.” This means GST will be levied on the actual bill and not on the card rate.
Return simplification
The GST Council approved the new return format and associated changes in law. All taxpayers, excluding small taxpayers and a few exceptions, will file one monthly return.
The return is simple, with two main tables — one for reporting outward supplies and the other for claiming input tax credit based on invoices uploaded by the supplier.
The Council also gave its nod to quarterly filing of returns by small taxpayers with a turnover of under ₹5 crore as an optional facility.
About 93 per cent of taxpayers fall under this category, and they will benefit substantially from the simplification.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.