The Goods and Servicea Tax (GST) Council is mulling over tax rate cut for seven items from the highest tax slab in its 31st meeting on Saturday. The all-powerful decision-making body on indirect taxes could be looking to bring GST rates for these seven items down to 18 per cent from 28 per cent, Puducherry Finance Minister V Narayanasamy told reporters outside Vigyan Bhawan in New Delhi where the meeting in currently underway.
While there is no clarity on the items that have been taken up by the GST Council for tax rate cut, it might consider a GST rate cut for air conditioners, television sets measuring between 28 and 32 inches, DSLR cameras, and tyres, among other things. There is a good chance that the GST Council might onsider slashing GST rates for plug-in hybrid cars too, which currently fall in the 28 per cent tax slab.
Earlier this week, Prime Minister Narendra Modi had hinted towards further rationalising of the GST rates to place "99 per cent things" under sub-18 per cent GST slab. He had stated that the highest 28 per cent GST slab will only include few select items, like luxury and demerit goods.
Some states, however, might want in-depth deliberations on revenue implications of any further rationalisation of the GST rates before any relief can be extended to taxpayers. The Centre would find it difficult to wrest a consensus, if and when the time comes, after the BJP's poor show in the recently concluded Assembly elections in five states.
However, if they do come through, GST rate cuts are likely to be subject to some criticism, with the 2019 Lok Sabha elections only a few months away. Any tax rate cut will now be considered as a move to woo voters before the General Elections next year.
The GST Council is also reportedly looking into introducing composition scheme for the real estate sector, CNBC TV18 reported. The decision could, however, lead to loss of input tax for cement and steel that construction companies draw.
Delhi: 31st GST Council meeting underway at Vigyan Bhavan under the chairmanship of Finance Minister Arun Jaitley pic.twitter.com/j7T2sbffmF- ANI (@ANI) December 22, 2018
The GST Council could also mull over the revenue position of the Centre and states, facilitating refund-related rules for exporters. The issue of handing over the ownership of the GST Network to a government-owned company could also be discussed. This proposal has already been approved by the Cabinet in September.
Edited by Vivek Punj