The Goods and Services Tax (GST) Council has reduced the rates on 29 goods and 53 categories of services.
Some of the services for which the rates have been cut include tailoring (18% to 5%), admission to theme parks (28% to 18%), and petroleum and natural gas mining and exploration (18% to 12%). The goods on which the rates have been reduced include biodiesel buses used for public transport (28% to 18%), sugar boiled confectionery, biodiesel, drinking water packed in 20 litre containers (all from 18% to 12%), and LPG supplied to domestic consumers by private distributors (18% to 5%). The new rates would come into effect on January 25.
“Rates have again been rationalised on few items, which is a step in the right direction,” Pratik Jain, Leader, Indirect Tax at PwC India, wrote in a note.
More cuts to come
“One would expect that over the next few months, this process would continue, particularly with respect to 28% category, which should only be for select luxury and demerit products,” he wrote.
Mr. Jaitley said that while the latest round of rate reductions would have an affect on the Centre’s revenues, the impact would be small.
“It was the opinion of the Council that so far we have relied on unilateral declarations by traders,” Mr. Jaitley said. “It was agreed that there is a need to build in anti-evasion measures. The e-waybill system [to be rolled out on February 1] will be one of these. As these anti-evasion measures are implemented, the revenues should start picking up again.”
Regarding easing the compliance burden, Mr. Jaitley said that the Council was considering systems where the invoices of the buyers and sellers could be matched easily. “The suggestion was that the filing of the form 3B should continue,” Mr. Jaitley said. “The sellers or suppliers should also load their invoices and give the details of whom the supplies were made to. This should act as a deterrent [against evasion] that the details in the invoices and the form 3B must match. Initially, the system would be of the form 3B and a suppliers’ invoice. It will be a very easy system.”
Mr. Jaitley, however, said that no decision had been taken in this regard and that the Council would take it up during its next meeting, the date for which had not been decided as yet. The inclusion of key sectors like petroleum and real estate in GST was not taken up in this meeting, according to him.
references: the hindu