New Delhi: The GST Council, in a crucial meeting on Saturday, slashed the rates of six items including TV and AC from a high of 28 per cent to 18 per cent, but failed to take a decision on cutting the rates of cement, which remained in the 28 per cent slab.
1. Items such as TV monitor up to 32 inches, power bank of Lithium Iron batteries, ACs, video games and small sport related items will now become cheaper as they have been removed from the 28 per cent slab.
2. Your movie viewing experience is also set to get sweeter as cinema tickets of up to Rs 100 have been brought down to 12 per cent from 18 per cent. Tickets above Rs 100 have been brought down to 18 per cent from 28 per cent. This will have an impact of about Rs 900 crore on revenue, Finance Minister Arun Jaitley who chaired the 31st council meeting said.
3. In all, six items have been brought down from 28 per cent slab to lower tax slabs while 33 items have been brought down to 12 per cent and 5 per cent from the 18 per cent slab. Only a select few sin goods items (luxury products) now remain in the 28 per cent slab. GST rates for automobiles, molasses, dishwashers too were left unchanged.
4.There will be no premium tax on chartered flights for religious purposes. Business class tickets will attract the usual 12 per cent GST and economy class at 5 per cent.
5. Rate reduction to come into effect from Jan 1.
6.Only 34 items will be taxed at 18 per cent.
7.Bank services to basic savings account exempted from GST.
8. GST rate on third party insurance premium of goods carrying vehicles has been brought under the 12 per cent slab from 18 per cent.
9.Cutting rates on cement and auto parts would cost the exchequer a Rs 13,000 crore and Rs 20,000 crore loss, respectively, Jaitley said.
10.The rate cuts could make the task of the Government for achieving a budgetary target of over 12 lakh crore for the fiscal difficult, unless it achieves a monthly mop up of Rs 1 lakh crore. In the last eight months, tax mop-up crossed Rs 1 lakh crore only twice — in April and October. Revenue collection from GST declined to Rs 97,637 crore in November from Rs 1 lakh crore in October.
11. A GoM will be set up to discuss and debate shortfall of states. This rate reduction will lead to Rs 6,000 crore implication on the economy.
12. Prime Minister Narendra Modi had on Tuesday said that the government will propose lowering GST on a majority of items currently in the 28 per cent slab to 18 per cent in order to boost customer sentiment. He added that the government wants to ensure that 99 per cent items fall under 18 per cent GST slab.
