Tax rates on 100 items are likely to be cut from 28 percent, with the GST council set to approve sweeping changes including simpler procedures and a single return filing form for small firms. "In each of the last three-four meetings (of the GST Council), about 20-30 items were brought down from the 28% slab to the 18% slab".
Several items under the highest GST slab of 28 per cent coulb be brought under the 18 per cent slab.
The GST Council will meet on November 9 and 10 in Assam's capital Guwahati.
"They were not ready to listen to us". The whole idea is that as your revenue collection neutralises, we must prune it (the list of items in the top slab). "I see that as a future guide as far as the Council is concerned", Jaitley had said. Many items that are now in the 18% slab will also be reduced further to the 12% slab.
The GoM has also suggested doing away with the tax rate distinction between AC and non-AC restaurants not covered under the composition scheme, and tax them at 12 per cent with input credit. There have been demands for lowering tax on wooden furniture as it is mostly handmade by unorganised sector artisans, with the middle class as the primary consumers. In an interview to PTI, Revenue Secretary said: "There is a complete overhauling that is required". The GST Council may also announce new incentives for small and medium enterprises (SMEs) in order to encourage digital transactions. He, however, said the overhauling would require some calculations by the fitment committee, which will decide which items need a rationalisation of rate under the GST.
Another significant proposal that could come up for the GST Council's approval is the inclusion of the GST component in the maximum retail price of goods.
In a bid to promote digital payments under GST, the Council could also consider incentivising merchants and traders by providing benefits in terms of credit or exemption within central and state GST.
While the Prime Minister assured last Saturday that the GST Council could resolve nearly all woes faced by businesses under the fledgling indirect tax regime, he attached a caveat that some States could thwart some of the proposed simplification measures.
A flat one per cent rate for manufacturers and restaurants will be considered, against the current rates of two per cent and five per cent, respectively.
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