Now, only 35 goods in highest 28% tax-bracket of GST
The Goods and Services Tax (GST) Council has pruned the 28% slab by cutting tax rates on 191 goods over the last one year, leaving just 35 items, including ACs, digital cameras, video recorders, dishwashing machines, and automobiles, in the highest tax bracket. There were around 226 goods in the 28% category when GST was implemented on 1 July last year.
GST rates slashed on 191 items in one year
Over the last one year, GST Council, chaired by Union Finance Minister and comprising state ministers, slashed rates on 191 items. The 35 goods, which will be left in highest slab once new GST rates are implemented from July 27, also include cement, automobile parts, tires, automobile equipment, motor vehicles, yachts, aircraft, aerated drinks, betting and demerit items like tobacco, cigarette, and pan masala.
Rate cuts lead to revenue loss but increase compliance: Official
GST Council brought down tax rates to 18% from 28% on 15 items, including vacuum cleaners, washing machines, 68cm (27-inch) TVs, fridges, laundry-machines, paints, and varnishes. "Rate cuts would lead to a revenue loss of about Rs. 6,000 crore," an official said. Experts say as revenues stabilize, the Council may further rationalize the 28% slab, restrict the highest-tax-slab to super luxury and sin goods.
Deloitte India Partner MS Mani on GST rates
Deloitte India Partner MS Mani said it would be logical to expect that once GST collections after recent reductions stabilize, remaining items like televisions of all sizes, dishwashers, digital cameras, air conditioners could be in 18% slab. "It would be ideal if only demerit goods are retained in the 28% slab so that...gradual movement towards having fewer GST slabs can be initiated," Mani said.
EY Partner Abhishek Jain's statement
Meanwhile, EY Partner Abhishek Jain said: "The reduction of GST rates from 28% to 18% shows that directionally, the Government seems to be clear that the 28% rate should be restricted to super luxury and sin goods."
