Insulin, cashews, pickles to get cheaper: GST Council reduces rates of 66 products

Telecom rates unchanged; meeting on June 18 to discuss residual issues

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With two weeks to go for the goods and services tax (GST) roll-out, the GST Council on Sunday reduced the rates for 66 items and expanded the scope of the composition scheme for the benefit of small traders, manufacturers, and restaurateurs. The composition scheme is a presumptive taxation scheme allowing small traders, manufacturers and restaurants to pay a 1-5 per cent GST rate on sales without tax credits.

Insulin, pickles, printers, agarbattis, school bags, and cashew nuts are among the 66. Those were among 133 items whose rates were reviewed following industry representation. However, the GST rates for telecom services, marbles, granite, spectacles, among others, were retained, which drew flak from the respective sectors.

Union Finance Minister Arun Jaitley, who is the head of the Council, said in certain cases the rate fitment committee went beyond the equalisation principle of maintaining the current tax incidence.|Economy news

“There are certain items that were historically taxed at a higher rate, but the Council felt that the burden needed to be reduced,” said Jaitley. The finance minister said the average of all the rates decided by the Council was significantly lower than the present tax incidence.

On the question about any further revision of rates, he said the fitment committee and the GST Council had gone into all the cases in depth and the rates had been decided after discussion.

“These broadly are the final rates… Just because somebody raising an issue does not mean you have to grant it,” he said.

On the automakers’ pitch for a lower rate for hybrid cars, Jaitley said the facts presented by the industry were not correct. “If necessary, it will come up for discussion,” Jaitley said.

The current level of tax on hybrid cars stands at 30.3 per cent, as against 43 per cent (28 per cent plus 15 per cent cess) decided by the Council.

Providing relief to small entities under the GST, the composition scheme has now been expanded to traders, manufacturers, and restaurants with an annual turnover of Rs 75 lakh as against Rs 50 lakh decided earlier.

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