New Delhi: The 31st GST Council meeting on Saturday decided to move 33 items from the 18 percent tax slab to 12 percent and 5 percent while seven items were moved from 28 percent slab to 18 percent bracket.
The tax on wheel chairs has been reduced from 28 to 5 percent, movie tickets up to Rs 100 which had a GST of 18 percent have been brought down to 12 percent, the third party insurance has been reduced to 12 percent.
Also, special flights meant for religious trips will now be taxed at 5 percent for the economy and 12 percent for business class. Earlier, it was at 28 percent. Additionally, the GST on solar power generating plants will now be at 5 percent.
“The goods which are still under the 28 percent slab are mostly luxury and sin goods,” informed Union Finance Minister Arun Jaitley. The 28 percent slab has items including automobile parts and cement. The finance minister termed them as high revenue items that need to be taxed for the fiscal health of the economy. Automobile parts generate Rs 28, 000 crore and cement, Rs 13,000 crore, added Jaitley.
While air conditioners and dish washers were not removed from the 28 percent slab, three items were moved from 18 percent to 12 percent, one item was shifted from 18 percent to 5 percent along with other changes in tax rates as well.
Jaitley also announced that a group of ministers will be studying the data on two years of GST and will be taking the expert assistance of NIPFP to find out the broad analysis indicates.
The next meeting is scheduled to be in January where a new composition scheme will be framed for small service providers. The threshold for small services will be taken up in next month.
Taxation on lottery is also on the next meeting’s agenda. As of now, 12 percent for state organised lotteries and 28 percent on state authorised lotteries is taxed. The 32nd council meet will also decide on MSMEs’ threshold limit.
Jan Dhan Yojana account holders and services provided by banks for deposit account holders will be exempted from tax.
“The original demand by the Congress that all goods should come down to 18 percent and below except luxury items has almost been agreed by the government. Except 34 items, all other will come down to 18 percent and below,” said Narayanasamy.
The state’s finance minister also said that seven items have been moved from the 28 percent slab to 18 percent.
The council met on Saturday amid heightened expectation of rate cuts following Prime Minister Narendra Modi’s statement this week that ’99 per cent things’ would soon attract sub-18 per cent GST.
Over 1,200 goods and services fall into four broad tax slabs — 5, 12, 18 and 28 percent. Currently, there are close to 40 goods and services in the 28 percent slab, which comprises demerit and luxury goods, among other items.
The move is being seen in political circles as an attempt to woo the middle class months ahead of the 2019 Lok Sabha elections