Goods and Service Tax (GST) – the biggest indirect tax reform in India, is to be levied on consumption of goods and services and will subsume the taxes levied by Central and State Government like Service Tax, Central Sales Tax, Central Excise Duty, Additional Excise Duty, Additional Customs Duty (CVD), Special Additional Duty of Customs (SAD), State Value Added Tax, Entertainment Tax, Luxury Tax, Purchase Tax, Entry Tax, Surcharges and Cesses related to goods and services into a single taxation system. Tremendous benefits are expected to be gained from the implementation of the GST Scheme in India.
Recent Revisions in Rates:
There are four tax slabs under GST – 5%, 12%, 18% and 28%. After the industries and states complaining that goods are going to become much expensive after the GST roll out from 1st July, the GST council revised rates of 66 items (representations were received for 133 items). Salt, Pickles, Ketchups And Sauces, Cashew Nuts, Raisin, Cutlery, Insulin, School Bags, Colouring Books, Notebooks, Printers (other than the multifunctional ones), Computer Monitors (below 17 inches), Incense Sticks, Kajal, Movie Tickets, CCTV, Set Top Box, Bamboo Furniture, Postage or Revenue Stamps are a few of them.
Packaged food items (fruits and vegetable products, pickles, mustard sauce, topping spread, instant food mixes etc.) will attract 12% GST, as against 18% set earlier. It is also revised that the rate of Salt will be 0% from 5%, Cashew Nuts will be 5% from 12%, Steel Cutlery will be 12% instead of 18%, School bags attract 18% from of 28%, and exercise books 12% instead of 18% while Colouring Books will have 0% GST rate, incense sticks will be rated at 5% instead of previously proposed 12% rate. Also, GST rates for Computer Printers, Monitors, CCTV, Set Top Boxes have been cut down to 18% from 28%. Movie tickets that cost below Rs.100 will now attract 18% rate of GST while for those over Rs 100 will continue to be at 28% rate.
For the services by way of job work in the textile sector, gems and jewelry sector or in relation to the printing of books/journals / periodicals, or processing of leather, a GST rate of 5% will be applicable instead of the 18% that was proposed earlier.
Change in the GST Composition Scheme:
Businesses dealing in goods can opt for the GST Composition Scheme, but service providers (other than Restaurants) are outside the scope of this. Previously this composition scheme was available for businesses having a turnover of up to Rs. 50 lakh per annum. Now, this ceiling limit has been revised and the option can be availed by those having a turnover of up to Rs. 75 lakh per annum. Thus, there is a change in the threshold limit and as a result, more entities will be able to take advantage of the composition scheme. The SMEs in the country will be boosted impacting the GDP of the country in a positive way. Restaurants, manufacturers, and traders, subject to that ceiling limit can avail the composition scheme with lower rates of 5%, 2%, and 1%, respectively. However, no input tax credit will be allowed under this scheme.
The next meeting is to be held on 18th June 2017 in which taxes on a lottery and e-way bill matters are to be discussed.