GST Council meet: GST rate on 29 items, 54 services cut; return filing to be simpler

New Delhi: In a bonanza for consumers, the Goods and Services Tax rates are being reduced on many more items (29) and services (53) with effect from January 25. Also, there is a distinct possibility of petrol, diesel and real estate being brought in the GST ambit before the Union budget on February 1. Households can now take a huge sigh of relief as the GST council has cut the tax rate on domestic LPG sold by private companies to 5 per cent from 18 per cent.

Likewise, the GST rate on bio-fuel powered buses has been cut to 18 per cent — from 28 per cent. The rate on diamonds and precious stones has been cut from 3 per cent to 0.25 per cent. Sugar boiled confectionary and drinking water packed in 20 litre bottles will attract GST of 12 per cent, as against 18 per cent earlier. Drip irrigation system, including laterals and sprinklers, will also attract lower GST of 12 per cent, instead of 18 per cent earlier. This will benefit the farmers. Cigarette filter rods will attract higher GST rate of 18 per cent, as against 12 per cent currently.

The Kerala finance minister said the GST on used cars has been reduced to 12%. The council has decided to exempt from GST supply of services by way of providing information under the RTI Act. It has also exempted legal services provided to the government. The tax rate on tailoring service has been reduced from 18 per cent to 5 per cent. The admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet will also be reduced from 28 per cent to 18 per cent.

This is not the last meeting of the council before the Union Budget as another meeting is planned in 10 days. The decision to bring petrol, diesel and some other exempted items under GST may be taken up in this meeting. Similarly, no decision has been taken yet on real estate, although a presentation was made on it in the council meeting. It will be also taken up in the next meeting.

The meeting has come at a time GST collections are drastically down. These collections slipped for the second consecutive month from Rs 83, 000 crore to Rs 80,808 crore in November. The collections fell after the Council cut rates on as many as 178 items. The council also decided to make the process of filing GST returns simpler to ease compliance burden for small businesses. The council also discussed the e-way bill, which is scheduled to be rolled from February 1 during the Budget session of Parliament. If the inter-state e-way bills are not filed by February 1, there will be a penalty.

SERVICES

Exemption for services by way of providing information under the RTI Act.

Also exempted legal services provided to government.

Tax rate on tailoring service reduced from 18 per cent to 5 per cent.

Admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet will be cheaper.

ITEMS

GST rate cut on domestic LPG sold by private companies.

Rate cut on bio-fuel powered buses — to 18 per cent from 28 per cent.

Rate on diamonds and precious stones cut from 3% to 0.25%.

Sugar boiled confectionary and drinking water packed in 20 litre bottles will attract GST of 12%, as against 18% earlier.

Drip irrigation system will attract lower GST.

Cigarette filter rods will attract higher rate.

GST on used cars cut to 12%.

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