New Delhi, November 15: After the Goods and Service Tax Council rejigged the new tax regime and reduced the 28 per cent tax to 18 per cent or lesser, 178 items will be cheaper from Wednesday. In the biggest GST rejig yet, tax rates on items ranging from chewing gum to chocolates, to beauty products, wigs and wrist watches, were cut to provide relief to consumers and businesses amid economic slowdown.
As many as 178 items of daily use were shifted from the top tax bracket of 28 per cent to 18 per cent, while a uniform 5 per cent tax was prescribed for all restaurants, both air-conditioned and non-AC, Finance Minister Arun Jaitley had said after the GST Council meeting in Guwahati on November 10. Also read: GST Council Recommendations Are in Spirit of Feedback Govt is Getting From Stakeholders: PM Modi
The GST Council pruned the list of items in the top 28 per cent GST slab to just 50 from 228 which meant only luxury and sins goods were now in the highest tax bracket and items of daily use were shifted to 18 per cent.
Tax on wet grinders and armoured vehicles was cut from 28 per cent to 12 per cent. The tax rate on six items was reduced from 18 per cent to 5 per cent, on 8 items from 12 per cent to 5 per cent and on six items from 5 per cent to nil.
Chewing gum, chocolates, coffee, custard powder, marble and granite, dental hygiene products, polishes and creams, sanitary ware, leather clothing, artificial fur, wigs, cookers, stoves, after-shave, deodorant, detergent and washing power, razors and blades, cutlery, storage water heater, batteries, goggles, wrist watches and mattress are among the products on which tax rate has been cut from 28 per cent to 18 per cent.
The top tax rate is now restricted to luxury and demerit goods like pan masala, aerated water and beverages, cigars and cigarettes, tobacco products, cement, paints, perfumes, ACs, dish washing machine, washing machine, refrigerators, vacuum cleaners, cars and two-wheelers, aircraft and yacht.
Restaurants used to charge 12 per cent GST on food bill in non-AC restaurants and 18 per cent in air-conditioned ones. Now, uniform 5 per cent tax will be levied on all restaurants without the distinction of AC or non-AC.
Restaurants in starred-hotels that charge Rs 7,500 or more per day room tariff will be levied 18 per cent GST but ITC is allowed for them. Those restaurants in hotels charging less than Rs 7,500 room tariff will charge 5 per cent GST but will not get ITC.
Launched on July 1, the GST weaved 29 states into a single market with one tax rate but while traders and small business complained of increased compliance burden, voices of dissent rose on high tax rate on some common use goods.
GST tax slabs of 5, 12, 18 and 28 per cent were decided going by the principle of fitting each item into a category most close to cumulative pre-GST taxes.
With inputs from PTI