More GST items to get relief post Council Meeting

downloadThe GST Council is likely to consider a reduction in rates for 30-35 products, including sanitary napkins, handlooms, and hotels, at its meeting on Saturday.

The GST on sanitary napkins could be brought down to 5 percent from 12 percent, according to sources in the finance ministry.

However, the Centre will not place any proposal to bring petroleum products under the ambit of the all-India tax regime. “Objections from the states mean that any such proposal will be rejected. Hence, it was meaningless to bring such a proposal at this stage,” officials said.

Women rights activists as well as female politicians, cutting across party lines, had sought the reduction of the GST on sanitary napkins.

The handloom industry had been seeking a better rate as it had a complex duty structure where some items are exempt from tax, while other attract 5-18 per cent GST.

Various weavers associations from the south met textile ministry officials on Thursday and demanded the reduction and simplification of the duty structure. Officials said that some more handloom items could be placed in the zero tax bracket and some items in the 12 per cent or 18 per cent bracket could be brought down to 5 per cent.

Similarly, the hotel industry finds the differentiated rates between 0 per cent and 28 per cent confusing and at times discriminatory. Restaurants who face the GST of 5 per cent are unable to claim credit.

Hoteliers have complained foreign tourists would visit rival locations such as Nepal and Sri Lanka where the rates were lower. “The 28 per cent tax rate on our hotels, resorts and conference venues is a killer,” said Debasish Chatterjee, director with travel firm CTI Ltd.

Finance minister Piyush Goyal had last week said the GST Council may look at rationalising more rates based on “meritorious reason“, while ensuring such cuts in taxes did not hit revenues.

Officials said they also planned to bring in amendments to the GST act to allow for easier return filing procedures and omission of liability to pay tax on reverse charge. It will also allow more service providers to opt for a composition scheme and permit changes in input tax credit norms and refund rules.


Source: The Telegraph

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