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GST Rate reduced for almost 29 goods, 53 categories of services

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Finance Minister Arun Jaitley today declared tax cut on 29 goods and 53 categories of services that is approved by the GST Council. Jaitley, who heads the powerful GST Council, announced that the new rates will be effective from January 25.

A 25th meeting was organized today by the Council that considered simplification of the return filing process and chairman of Infosys, Nandan Nilekani will be meeting members to work on this, said Jaitley. Even during today’s meeting, Nilekani was present and made a presentation. Infosys is the IT service provider for GST technological network.

The Union finance minister also said that in the next meeting, the Council possibly consider including petroleum and other exempt items within the purview of GST.

GST rate was deducted from 28 percent to 18 on second-hand medium and large cars and SUVs by the Council, while other old and used motor vehicles will see a deduction of 12 percent. GST on LPG supplied for supply to household domestic consumers by private LPG distributors will be reduced to 5 percent from 18 percent.

Bio-fuel powered buses received GST cut from 28 percent to 18 percent. The GST rate on Diamonds and other precious stones will see a cut from 3 percent to 0.25 percent. Sugar boiled confectionary and drinking water packed in 20-litre bottles will get GST of 12 percent, rather than 18 percent earlier. Drip irrigation system incorporating laterals, sprinklers will be levied 12 percent of GST, rather than 18 percent earlier.

However, Cigarette filter rods will be getting higher GST rate of 18 percent instead of 12 percent currently.

The GST Council had also made a decision to exempt supply of services by way of providing information under the RTI Act. The council too exempted legal services provided to the government. The council decided to deduct the tax rate on tailoring service from 18 percent to 5 percent. The admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet will also be reduced from 28 percent to 18 percent.

The GST provision requiring transporters to carry an electronic waybill or e-way bill, when shifting goods of over Rs. 50,000 in value between states, will be applied from February 1. This will aid us in examining tax evasion, he added.

Jaitley went on say that 15 states have decided to apply the provision for intra-state movements as well. When the e-way bill system will be put to force, tax avoidance will become extremely hard as the government will have details of all goods above the value of Rs. 50,000 moved. The government can even spot the difference should either the supplier or the purchaser does not file tax returns, claim experts.

Jaitly said that GST collections with regard to the composition scheme are a matter of concern. There appear to be cases of under-declaration under the composition scheme, he added.

Composition scheme allows small businesses to pay taxes at a concessional rate and makes compliance easy under the Goods and Services Tax (GST).

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