Guwahati : The GST Council may on Friday consider reducing items in the 28 per cent tax slab and slash rates for daily use items, plastic products and hand-made furniture as it looks to provide relief to consumers. Four months after the Goods and Services Tax (GST) was rolled out, the panel headed by Union Finance Minister Arun Jaitley will look at the most comprehensive overhaul of rates, easing returns filing and providing more relief to small and medium enterprises, official sources said.
The 23rd meeting of the Council, being held here, will also deliberate on the suggestions made by Assam Finance Minister Himanta Biswa Sarma-headed GoM to cut tax rates for the composition scheme businesses to 1 per cent and lower rates for non-AC restaurants.
The Council, comprising state finance ministers, is also set to review the GST returns filing cycle and make it taxpayer friendly. The Council may on Friday rationalise rates in sectors where the total incidence of taxation has gone up because the goods were either exempt from excise or attracted lower VAT rates under the previous indirect tax regime. As the Council tries to accommodate industry concerns on tax rates, after estimating the impact on revenue, a rationalisation of items in the 28 per cent tax bracket is expected. “Most of the daily-use items like shampoo could be lowered to 18 per cent. Tax rate on items like furniture, electric switches and plastic pipes could be relooked at,” an official said.
Besides, making the composition scheme more attractive is on the agenda and as per the Group of Ministers (GoM) recommendations, the Council may decide to allow businesses in inter-state trade to opt for the arrangement. The GoM had also suggested slashing tax rate to 1 per cent for manufacturers and restaurants opting for the scheme from 2 per cent and 5 per cent, respectively.
It was in favour of doing away with the tax rate distinction between AC and non-AC restaurants, those which are not covered under the composition scheme and tax them at a flat 12 per cent. Currently, non-AC restaurants are taxed at 18 per cent. It also suggested that eating out at hotels that have room tariff of more than Rs 7,500 should attract a uniform 18 per cent rate instead of any separate category for 5-star hotel, which currently falls under the 28 per cent bracket.
Overhauling on cards
- The GST Council may on Friday consider reducing items in the 28 per cent tax slab and slash rates for daily use items, plastic products and hand-made furniture as it looks to provide relief to consumers
- Returns filing will also be easier providing more relief to small, medium businesses