Industry welcomes GST cut in over 200 items

Industry welcomes GST cut in over 200 items

The GST Council headed by Finance Ministery Arun Jaitley have chose to increase the annual turnover eligibility for the composition scheme to Rs 2 crore.

The traders body CAIT has welcomed the move to cut GST rates on over 200 items, saying the relief granted to businesses and consumers will be a game-changer in simplifying the tax regime and encourage its wider adoption. All the new amended rates would be applicable from November 15, 2017. "But the GST Council has further pruned 12 more items", Bihar Deputy Chief Minister Sushil Kumar Modi said. From the existing 18 per cent, the rates have been reduced to 5 per cent without input tax credit. While consumers will stand to benefit from a number of rate cuts, including the tax on restaurants, businesses stand to benefit from a significant easing of compliance norms to do with filing returns.

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The Council has also decided that where such late fee was paid, it will be re-credited to their Electronic Cash Ledger under "Tax" head instead of "Fee" head so as to enable them to use that amount for discharge of their future tax liabilities.

Procter & Gamble, Nestle and Perfetti Van Melle said they have either made a decision to cut down prices or are planning to do so after the GST Council cut tax on consumer goods to 18 percent from 28 percent, the Times of India reported.

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The GST Council on Friday made a decision to cut tax rate on a wide range of daily-use items - from chewing gums to detergents - to 18 percent while keeping only 50 items, mostly demerit, sin and luxury goods in top 28 percent bracket, Bihar Deputy Chief Minister Sushil Kumar Modi said. Currently, 12 per cent GST on food bill is levied in non-AC restaurants and 18 per cent GST for AC restaurants. "There was consensus that slowly 28% slab should be brought to 18% cent". The facility of input tax credit for restaurants is, however, being withdrawn as they had not passed on this benefit to consumers, Jaitley said. Threshold for composition scheme was hiked to 1.5 crore.

Other firms too objected the move of the council. Even now, it makes little sense for a commodity like cement to be subjected to a 28 per cent tax.

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Deloitte India Partner Mahesh Jaising said: "The reduction in GST rates should reduce the burden on the common man".

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