In the next meeting the GST Council will discuss ways to give relief to the handloom and handicraft sector
The Goods and Services (GST) Council cut rates on 178 items to 18 percent from 28 percent, and slashed taxes on all standalone restaurants to 5 percent, among the host of other crucial decisions that it took on Friday. The Council, which met in Guwahati, decided to keep only 50 luxury and 'sin' goods like tobacco in the highest slab, paving the way for price cuts in raft of commonly used goods from furniture to sanitary ware, electrical fittings, detergents, marble flooring and toiletries.
In an interaction with Moneycontrol on Friday night, Assam Finance Minister Himanta Biswa Sarma said there is still scope for revision and rates of around five or six items can still be lowered from the 28 percent slab.
The GST Council meeting was heavy on agenda. How do you think it will help the taxpayers?
Sarma: When we decided to implement GST, we promised the taxpayers that after three months we will have a review. Some review had already been taken place in Delhi. Some were still left for further examination. Today (Friday), we completed one part of it because except sin goods and white goods, we have brought down items in the 28 percent slab. Many procedural changes have happened. For small traders, composition limit has been hiked. Exempted goods have been exempted from calculation on tax. This is a huge relief for the people.
I think consumers will get the benefit straight away as tax rates on restaurants have been reduced to 5 percent. There are many more things, which we need to discuss in the next meeting. We had also thought of discussing (the possibility of) inclusion of realty sector under GST. We could not discuss it today, but will take it up in the next meeting.
In the next meeting we will also discuss ways to give relief to the handloom and handicraft sector.
What were your key recommendations for the real estate sector?
Sarma: It was on agenda. Since we could not take it up today, it will be premature to talk about it.
What will be the revenue implications of latest decisions?
Sarma: We cannot calculate the revenue implications as you don't know the revenue against the item. A lot of amount is stuck in IGST (integrated GST), refund is also due. We have discussed the matter. Revenue may be reduced by Rs 20,000 crore (due to shifting of products to lower tax brackets, including tax rate for restaurants) but that is again a notional figure.
What sort of relief does the handloom and handicraft sector require?
Sarma: Some discussions took place today and finally we have decided that this is a very important issue because HSN (harmonised system of nomenclature) code is similar. Suppose there is a handmade soap and a soap produced by a large company. How do we give relief to the handmade soap when HSN code is same?
One way to give relief is to increase the revenue threshold for the composition scheme. That we have done. But that may not be the final thing. Ultimately, you need to examine how HSN codes may be differentiated between handmade, handloom, powerloom and other products. So we have set this thing in motion. But you will have to wait for the final outcome.
Is there a possibility of further reduction in items in the 28 percent slab?
Sarma: At the end of the day, we want to see maximum items out and only few items remaining in the 28 percent slab. But, that depends on how much revenue the government is generating. I think there is still scope for few revisions. What my own understanding is that another 5-6 goods can come down to 18 percent instantly. But beyond that you have to wait for the revenue implications. These items will be taken up for discussion in the next meeting.Also Read: Full list of GST Council recommendations for returns filing
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