Major Changes:
- GST on movie tickets costing up to Rs 100 was cut to 12 % from 18%
- Monitors and TV screens up to 32 inches and power banks will attract 18% GST as opposed to 23% earlier
- The new rates come into effect from January 1, 2019
GUWAHATI: Ahead of the 2019 general elections, the GST Council 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 the press after the after the 31st meeting of the Goods and Services Tax (GST) Council.
Of the 23 goods and services on which 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 at present 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 affected the social expenditure of Central and State governments.
“The next target will be rate rationalisation in cement as and when affordability improves,” Jaitley said, adding reducing GST on cement would have cost an annual Rs 13,000 crore to the exchequer.
The annual revenue implication of the rate cuts would be Rs 5,500 crore, he said.
The GST on movie tickets costing up to Rs 100 cut to 12 per cent, from 18 per cent, tickets over Rs 100 to attract 18 per cent GST, against 28 per cent earlier. This will have annual revenue implication of Rs 900 crore.
Monitors and TV screens up to 32 inches and power banks will attract 18 per cent GST, as against 28 per cent earlier. The annual revenue loss on account of this would be Rs 1,500 crore.
The rate rationalisation comes after Prime Minister Narendra Modi indicated on Tuesday that the 28 per cent slab of GST would only be restricted to a few select items, such as luxury and sin goods and said his government wants to ensure that 99 per cent items attract 18 per cent or lower GST.
The GST Council has also decided to slash tax rate on parts and accessories for the carriages for disabled persons from 28 per cent to 5 per cent. Also third party insurance premium of goods carrying vehicles has been reduced from 18 per cent to 12 per cent.
The other items will attract lower GST rate of 5 per cent include marble rubble, natural cork, walking stick, fly ash blocks.
Music books and vegetables, frozen, branded and put in an unit container and vegetables provisionally preserved but unsuitable in that state for immediate consumption have been exempted from GST.
Services supplied by banks to basic savings bank deposit account holders under the Jan Dhan Yojana will not attract GST.
Air travel of pilgrims by non-scheduled/charter operations being facilitated by the government under bilateral arrangements will attract a lower GST rate of 5 per cent.
The Council has decided that 5 per cent would be levied on renewable energy devices and parts for their manufacture.
Jaitley further said that the Council has decided that businesses which are supposed to pay GST and file returns but have not done so far, should file it by March 31, 2019, to avoid penalty.
Inputs from PTI
