GST cut on 30 items

Hyderabad: The GST rates on 30 items of mass consumption were slashed on Saturday while the cess on mid and high-segment cars went up as the Council formed a five-member committee to sort out technical glitches faced on the return-filing portal while the last date for GSTR 1 has been extended by a month.

While mid-size and luxury cars and SUVs would cost more as the GST Council decided to levy an additional 2-7 per cent cess, small cars and hybrid vehicles got a relief. Khadi fabric sold through KVIC stores would be exempted from the GST.

Addressing the media at the end of the 21st meeting of the GST Council, Union Finance Minister Arun Jaitley said the GST has been cut on dried tamarind, custard powder, oil cakes, dhoop and other similar items, plastic rain coats, rubber bands, rubber rolls for paddy de-husking, computer monitors and kitchen gas lighters and brooms and brushes.

The decision to lower the GST on essential goods was taken to reduce the burden on the people. Jaitley said the GST on about 30 items have been lowered after anomalies in the fixation of rates were pointed out.

Unbranded food items are exempted from the GST, whereas branded and packaged food items attract 5 per cent GST. Hence, many businesses are deregistering their brands to avoid the levy.

Jaitley further said that food stuff sold in open was categorised at zero per cent tax rate, while the branded ones attracted 5 per cent He said the GST council had decided not to levy any additional tax on small petrol and diesel cars of up to 1200 cc as well as on hybrid ones. The date of implementation of the additional cess will be notified later.

Tax on mid segment cars had gone down from 48 per cent to 43 per cent and the Council on Saturday decided to increase cess by 2 per cent to 45 per cent. Large cars got an advantage of 8 per cent, but the Council hiked the cess by 5 per cent, he said adding SUVs got benefit of 11 per cent post GST, but the cess is being hiked by only 7 per cent.

The Council, he said, decided that in large vehicles where affordability of consumers is high, the pre-GST rate has not been restored. "Even though we had a headspace of hiking cess by 10 per cent, it has been hiked by 7 per cent only," the Finance Minister said.

The minister said to deal with businesses which are deregistering brands post-GST to avoid taxes, the panel had decided on May 15, 2017 as the cut-off date for considering as a registered brand for the purpose of GST levy, irrespective of whether or not the brand is subsequently deregistered.

The deadline for filing of sales return or GSTR-1 for the month of July, the first month of implementation of the new tax regime, has been extended by a month to October 10. Deadlines for other three returns to be filed under the GST regime have also been extended. The minister said overall GST collections have been robust with over 70 per cent of eligible taxpayers filing returns of about Rs 95,000 crore.

The GST Council also decided to constitute a Group of Ministers to monitor and resolve the IT challenges faced during GST implementation in the states. Many state governments reported technical glitches during filing returns by the traders under the new tax system.

On Friday, the IT system was hanged due to heavy load. However, the government resolved the problem within 24 hours. To avoid such problems, the committee would study and make recommendations soon.

Another committee consisting of officers from both the Centre and sates under the chairmanship of Revenue Secretary to examine the issues related to exports.