In this blog, we will share with you a few things you may expect from the GST Council meeting tomorrow.
Expectations from the 31st GST Council Meeting
Slimming of the 28% GST Slab
Currently there are 34 goods which are taxed under the highest GST slab of 28%. This included certain commonly used items such as automobile tyres, digital cameras, air conditioners, dish washing machines, set top boxes, monitors, projectors, as well as construction materials like cement. Needless to say, both consumers as well as trade concerns were wary of the fact that a fair number of items which were widely consumed across India, and certainly weren’t ‘sin’ goods were taxed at the highest GST bracket.
A few days back, honourable Prime Minister Shri Narendra Modi set the stage for a GST rate cut when he stated that the GST Council will look to ensure that 99% of over 1,200 goods and services will attract GST of 18% or lesser, so that only luxury goods remain at the top slab. Going by that, speculations about the following GST tax rate cuts, from 28% to 18% are doing the rounds –
- Cement – Cement is expected to move down from 28% to 18%. While the move could cost the public exchequer about INR 20,000 crore annually, the GST council is still likely to go ahead, as it has the confidence that a lower tax rate will encourage people to buy it from formal channels, thus reducing tax evasion. In addition, this should play a huge role in boosting the housing sector as well.
- Computer Monitor
- Power Banks
- Third Party Vehicle Insurance
- Automobile Tyres
Other goods which are likely to be retained in the 28% slab include – aerated drinks, cigarettes, bidis, tobacco products, pan masala, smoking pipes, automobiles, aircrafts, yachts, revolvers, pistols, gambling & lotteries.
Rate Cuts in the Housing Sector
While recently some clarifications with respect to Real Estate were issued by the CBIC and GST Council, there have been calls from several forums to re-look at the existing GST rates. In connection with that, the following two proposals are expected to be discussed –
- GST rates for real estate to be brought down from 12% to 8%, in order to bring it to par, with the affordable housing with ITC claim option
- GST rates without ITC claim option to be brought down to 5%
Some other key agendas for the 31st GST Council Meeting will be:
- Further simplifying the Annual Returns i.e. Form GSTR 9
- Driving the completely online refunds process
- Decision to be taken on introducing Sugar Cess and Exigency / Disaster Cess based on the reports submitted by the sub-committees formed for analysing the same
- Deliberations on bringing Petrol and Diesel in the GST fold
Stay tuned for our blog tomorrow on the exact updates and notifications of the 31st GST Council Meeting!