GST rate cut for 29 goods, 53 services

Sanjeev Sharma

Tribune News Service

New Delhi, January 18

The Goods and Services Tax (GST) Council today decided to reduce from January 25 the rate for 29 goods and 53 services and, in a bid to streamline the functioning of the new indirect tax regime, finalised the e-way bill from February 1, besides discussing measures to simplify filing of returns.

As many as 15 states have decided to implement intra-state movement provisions.

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The 25th meeting of the GST Council, chaired by Finance Minister Arun Jaitley, also discussed anti-evasion measures as revenue collections under the composition scheme for small businesses have been very low.

The items for which GST has been reduced include diamonds (from 3 per cent to 0.25 per cent); old and used motor vehicles (medium and large cars and SUVs) and buses for public transport which run only on bio-diesel (from 28 to 18 per cent); old and used motor vehicles of the smaller category cars (from 28 to 12 per cent); items such as sugar-boiled confectionery, drinking water packed in 20 litre bottles, bio diesel and bio pesticides (from 18 to 12 per cent).

The goods on which the rate has been reduced from 18 to 5 per cent include mehendi paste in cones, LPG supplied by private distributors and tamarind kernel powder. Rates have also been reduced on velvet fabrics and items of straw and basketware.

On the services side, GST rate on tailoring service has been reduced from 18 per cent to 5 per cent.

The rate for admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet has been cut from 28 per cent to 18 per cent. The GST Council also enhanced the exemption limit of Rs 5,000 per month per member to Rs 7,500 in respect of services provided by Resident Welfare Association (unincorporated or nonprofit entity) to its members against their individual contribution.

It also issued clarifications so as to ensure that buyers pay the same effective rate of GST on property built on leasehold and freehold land.

It increased the threshold limit for exemption under entry from Rs 250 to Rs 500 per person for all theatrical performances and all other such activities in any Indian language in theatre.

Jaitley said the GST provision requiring transporters to carry an electronic waybill, when moving goods of over Rs 50,000 between states, would be implemented from February 1 to check tax evasion.

He said the collections under the composition scheme had been a major cause for concern and of the 17 lakh dealers registered, the collection was only Rs 370 crore and there was a need for anti-evasion measures. Jaitley said the IGST credit of Rs 35,000 crore was decided to be divided between the Centre and the states.