Once again there may be new tax rates as the 23 rd GST council meeting is scheduled to be held on Friday in Guwahati, Assam. In order to provide relief to consumers, the cabinet may consider trim items in the 28 per cent tax bracket and lower rates for daily use substances such as plastic products and hand-made furniture.
Officials sources told Press Trust of India (PTI) that closely four months after the GST was rolled out, the board headed by the Finance Minister Arun Jaitley will clock in the most comprehensive reform of rates, making returns easy and providing more relief to small and middle enterprises. The 23 rd meeting of the Council will also converse on the suggestions presented by the Finance Minister of Assam Himanta Biswa Sarma headed Group of Ministers (GoM) to reduce tax rates for the composition scheme businesses to 1 per cent and lower rates for non-AC restaurants.
Including all states Finance Ministers, the panel is also likely to audit the GST returns filing cycle and make it friendlier for taxpayers. It may also check the reforming rates in certain areas where the total incidence of taxation has gone up because the goods were either excused from excise or involved lower VAT rates under the previous indirect tax rule.
After calculating the impact on revenue, a reformation of items in the 28 per cent tax slab is also expected as the cabinet tries to accommodate the business concern on tax rates.
An official said to the PTI, “Most of the daily-use items like shampoo could be lowered to 18 percent. Tax rate on items like furniture, electric switches and plastic pipes could be relooked at.”
Apart from this, the GST board may also decide to allow business in inter-state trade to opt for the arrangements as per the GoM recommendations. Making the Composition scheme more attractive is also line-up. The GoM had also advised reducing rate to 1 per cent for restaurants and manufacturers opting the scheme from 2 per cent and 5 per cent, respectively.
The GoM was in side of doing away with the tax rate division between AC and non-AC restaurants, those which are not taken under the composition scheme and tax them at a flat 12 per cent. At present, non-AC restaurants are taxed at 18 per cent. It also proposed that eating out at hotels having room tariff of more than Rs. 7,500 should attract a uniform 18 per cent rate instead of any isolate category for 5-star hotel, which currently lies under the 28 per cent bracket.
In the meantime, Karnataka and Puducherry had expressed concerns on Thursday about the delay in the revenue buoyancy and endurance of compensation pay-out to UTs/states in the goods and services tax regime. They debated that the lower rate of compliance under the tax reforms is indicative of tax evasion. They also included, ”this is the right time for the government to bring real estate, petroleum and electricity under the ambit of the GST.”