Just a couple of weeks before Budget 2018, the GST Council have once again, slashed the GST rates on over 29 items and 54 categories of employment-oriented services with an aim to encourage more GST filing after a major plunge in revenues since July.
GST revenues across India has continuously fallen in months after its inception in July 2017 and reached down to a low of Rs 800 billion in November. Business owners have been complaining about the high rates of taxes and the cumbersome process of filing the taxes. In a bid to encourage more revenue compliance, the GST Council, during its 25th meeting on Thursday, decided to slash down the GST on a total of 83 employment-oriented goods and services. GST rates have now been cut down on goods and services like diamonds and precious stones, 20-litre water bottles, second-hand vehicles, tailoring services, some handicraft products, biofuel-run buses, entry into theme parks, joy rides, among others. Here is the complete list of products and services on which, lesser GST will be applicable:
GST from 28% to 18%:
Public transportation buses which exclusively run on biofuels. Old and used motor vehicles including cars which are not subject to any pending taxes. Service including admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet.
GST from 18% to 12%:
Sugar boiled confectionary, drinking water packed in 20 litters bottles, fertilizer-grade Phosphoric acid, bio-diesel, bio-pesticides, bamboo wood building joinery, drip irrigation system including laterals, sprinklers and mechanical sprayer. Services under common effluent treatment plans.
GST from 18% to 5%:
Tamarind kernel powder, mehendi paste in cones, LPG supplied for supply to household domestic consumers.
GST from 12% to 5%:
Articles of straw, esparto or of other plaiting materials; basket-ware and wickerwork.
GST from 3% to 0.25%:
Diamonds and precious stones.
Zero GST goods:
Vibhuti Parts and accessories for manufacture of hearing aids, De-oiled rice bran.
Apart from as cut on all the above mentioned items and services, the GST Council also discussed process to make return filing simpler with just one return to be filed every month. If implemented, the process of filing GSTR 1, 2 and 3 will be discontinued in future to reduce the huge compliance burden on trades and industries. However, the decision of filing single return every month will be finalised in next GST Council meeting which will be held before the Union Budget 2018. Perhaps, the new GST rates will be applicable from January 25, 2018.