PM Modi's promise kept… GST rates on 23 items cut
New Delhi: In a Christmas bonanza to the common man, the GST Council on Saturday reduced tax rates on 23 goods and services, including movie tickets, TV and monitor screens and power banks, and exempted frozen and preserved vegetables from the levy. The reduced rates are likely to come into effect from January 1, 2019, Finance Minister Arun Jaitley told reporters after the 31st meeting of Goods and Services Tax (GST) Council here.
Of the 23 goods and services on whose rates have been slashed, tax rate on seven items in the 28 per cent slab has been brought down. With this, only 28 goods are left in the highest 28 per cent tax bracket. The goods on which GST has been lowered to 18 per cent from 28 per cent include pulleys, transmission shafts and cranks, gear boxes, retreated or used tyres, power banks of lithium ion batteries, digital cameras, video camera recorders and video game consoles. The 28 per cent slab is now restricted to only luxury and sin goods apart from auto-parts and cement — the tax rate on which could not be cut due to high revenue implication.
"Rate rationalisation is an ongoing process. When the original rates were fixed, India had the most irrational taxation rates. Most of these items were charged, along with cascading effect, at 31 per cent. So we had only transiently put them at 28 per cent, because if we had immediately brought it down then the revenue impact would have been there and therefore the social expenditure of central and state governments would have suffered," said Jaitley.
"So therefore we followed a more realistic pragmatic and a prudent policy that as the revenues move up and affordability increases we gradually bring it down. Therefore 28 per cent bracket is already moving towards a sunset, except luxury and sin items, three of which are used by upper income group and only 1 item of common use remains," he added.