GST Council reduces tax rates

Goods and Services Tax Council has reduced the tax rate on 29 goods and 53 categories of services by bringing them in lower category. The new rates will be effective from 25th of this month. 

The GST rate on tailoring service has been reduced from 18 to 5 percent and tax on entry services to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet from 28 percent to 18. The tax rate on construction of metro and monorail projects has been brought down from 18 percent to 12 percent. Besides, the rate on job work services for manufacture of leather goods and footwear has been reduced to 5 percent.

The GST rate on transportation of petroleum crude and petroleum products including ATF has bee cut down from 18 percent to 5 percent without input tax credit and 12 percent with it. The GST rate on Common Effluent Treatment Plant services of treatment of effluents from 18 percent to 12 percent. 

The GST rate on the Works Contract Services provided by sub-contractor to the main contractor to governments and local bodies has been lowered. The GST Council has also given tax exception to services provided by and to FIFA and its subsidiaries related to any of the events under FIFA U-20 World Cup to be hosted by India. 

The all-powerful GST Council yesterday veered around the idea of making the GST return filing process simpler to ease compliance burden for small



businesses.

Briefing reporters after the meeting, Jaitley said the next meeting of the Council may consider bringing items like crude oil, natural gas, petrol, diesel, ATF and real estate within the GST purview.In a bid to ease compliance burden, the Council veered around to the idea of registered entities continuing to file the return in GSTR 3B Form while moving to a system where supplier invoice captures details of the transaction.

The new process would be finalised in the next meeting of the GST Council after a written formulation is circulated to the states, he said.The date of the next meeting of the Council has not yet been decided, he said.

Jaitley said the GST provision requiring transporters to carry an electronic waybill or e-way bill, when moving goods of over Rs 50,000 in value between states, will be implemented from February 1 to check rampant tax evasion.

As many as 15 states have decided to implement the provision for intra-state movements as well, he said.After implementation of the Goods and Services Tax (GST) from July 1, the requirement of carrying e-way bill was postponed pending IT network readiness.

Once the e-way bill system is implemented, tax avoidance will become extremely difficult as the government will have details of all goods above the value of Rs 50,000 moved and can spot the mismatch if either the supplier or the purchaser does not file tax returns.