All Restaurants To Be Taxed At 5% GST, Rates On Over 200 Items Cut
Rates on a host of products was lowered by the Goods and Services Tax Council.
The Big Decisions Of The 23rd GST Council Meeting
- GST Council cuts rates of 211 items spread across all tax brackets.
- All standalone restaurants will face 5 percent GST but won’t get input tax credits.
- Government will pass an amendment to increase the threshold limit of the composition scheme to up to Rs 2 crore.
- Once that amendment is passed, the Council will hike the threshold to Rs 1.5 crore.
- GST Council extends deadlines for filing GST returns, simplifies filing process further.
GST Council Cuts Rates On Over 200 Items
From 28% to 18%
- Electrical items like wire, cables, insulated conductors, pugs, switches, sockets
- Electrical board panels, consoles
- Particle fibre board, ply wood, wood, wooden frames
- Furniture, mattress, bedding
- Trunk, suitcase, vanity cases, brief cases
- Detergents, washing and cleaning preparations
- Liquid or cream for washing theskin
- Shampoos, hair creams, hair dyes, Henna power/paste
- Pre shave, shaving or after shaving preparations
- Perfumes, toilet waters
- Beauty or make-up preparations
- Fans, pumps, compressors
- Lamp and lightings
- Primary cells and primary batteries
- Sanitary ware and parts
- Articles of plastic, floor covering, baths, shower, sinks
- Slabs of marbles and granite
- Goods of marble or granite such as tiles
- Ceramic tiles of all kinds
- Vacuum flasks, lighters
- Wrist watches, clocks, watch movement, watch cases and parts
- Apparel and clothing accessories of leather, guts, furskin, artificial fur etc...
- Razor and razor blades
- Multi-functional printers and cartridges
- Office or desk equipment
- Door, windows or frames of aluminium
- Articles of plaster such as board, sheet
- Articles of cement or concrete or stone
- Articles of mica or asphalt
There are another 89 items on this list which will be updated shortly.
From 18% to 12%
- Condensed milk
- Refined sugar and sugar cubes
- Pasta
- Curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasoning
- Diabetic food
- Medicinal grade oxygen
- Printing ink
- Hand bags and shopping bags bags of jute and cotton
- Hats (Knitted or crocheted)
- Parts of agricultural, horticultural, forestry, harvestings or threshing machinery
- Specified parts of sewing machine
- Spectacle frames
- Furniture wholly made of bamboo or cane
From 18% to 5%
- Puffed rice chikki, peanut chikki, sesame chikki, revdi, tilrevdi, khaza, kazuali, groundnut sweets gatta, kuliya
- Flour of potato put up in unit container bearing a brand name
- Chutney powder
- Fly ash
- Sulphur recovered in refining of crude
- Fly ash aggregate with 90% or more fly ash content
From 12% to 5%
- Dessicated coconut
- Narrow woven fabric
- Idli, dosa batter
- Finished leather, chamois and composition leather
- Coir cordage and ropes, Jute twine, coir products
- Fishing net and fishing hooks
- Worn clothing
- Fly ash brick
From 5% to Nil
- Guar meal
- Hop cone
- Certain dried vegetables, such as sweet potatoes, maniac
- Fish frozen or dried
- Unworked coconut shell
- Khandsari sugar
HUL, Mondelez Say They Will Pass On Lower Rates To Consumers
It is a welcome step which will benefit the consumers. HUL will be delighted to pass on the net benefits at the corporate level to the consumers.HUL Spokesperson
We have always believed in keeping the interest of our consumers in mind and will pass on the benefits to them.Mondelez India Spokesperson
Government To Bring Amendment To Hike Threshold For GST Composition Scheme
The finance minister today said the government will pass an amendment to increase the threshold limit of the composition scheme to up to Rs 2 crore. On an immediate basis, the Council will hike the threshold to Rs 1.5 crore once the amendment is passed, the finance secretary said.
The composition scheme allows small businesses to pay taxes at a lower rate without getting any input tax credits.
A uniform tax rate of 1 percent will apply on all traders and manufacturers. For restaurants, the rate remains unchanged at 1 percent. The Council expects most restaurants to opt for the 5 percent rate that will now apply to them instead of the 1 percent under the composition scheme, the finance secretary added.
Besides, the tax rate for composition dealers will now be applied to the taxable turnover, and not the total turnover, which was the case earlier.
GST Returns Filing Simplified Further
Filing of returns for GSTR-3B will continue till March, Finance Secretary Hasmukh Adhia said.
For small taxpayers, or people with no liability, the process will be simplified.
- In current year, only filing of GSTR-1 will be done
- All taxpayers with turnover of below Rs 1.5 crore, will file retun as per this timetable:
- Pending invoces for GSTR-1 will be filed by Dec 31
- For Oct-Dec, all invoices need to be filed by Feb 15
- Invoices for Jan-March must be filed by April 30, 2018
The government has found that nearly 30-40 percent filers had no returns to be filed, Adhia added.
For businesses with turnover above Rs 1.5 crore, the deadlines are as follows:
- GSTR-1 for July-Oct should be filed before Dec. 31
- Such taxpayers will file GSTR-1 monthly after 40 days. For example, the returns for November will have to be filed by Dec. 10, returns for Dec. will have to be filed by Jan. 10 and so on.
For taxpayers under the composition scheme, the deadline for filing GSTR-4 has been postponed to Dec. 24 from Oct. 18. Such taxpayers have to file returns quarterly, the GST Council had said in its previous meeting. Currently there are about 15 lakh taxpayers under this scheme.
Late Filing Penalty
- In cases where there is no transaction to be reported, the fine for late filing will be reduced to Rs 20 per day from Rs 200 per day.
- For others, the penalty will be reduced to Rs 50 per day from Rs 200 per day.
No ITC For Restaurants
All restaurants will come under the 5 percent GST bracket and the industry will not get the benefit of input tax credit as they have failed to pass these on to consumers, Jaitley said.
GST Council Approves Lower Rates On Host Of Items
Rates on 178 items in the 28 percent slab reduced to 18 percent, Arun Jaitley says. The Council also decided on the following changes:
- Rates on 2 items to be reduced from 18 percent to 12 percent. These include wet grinders and armoured fighting vehicles
- Rates on 13 items reduced from 18 percent to 12 percent
- Rates on 6 items reduced from 18 percent to 5 percent
- Rates on 8 items reduced from 12 percent to 5 percent
- Rates on 6 items reduced from 5 percent to zero
The new rates will come into effect from November 15.
Big GST Changes
GST Council reviewed rates to rationalise it, says Finance Minister Arun Jaitley addressing the media.
We have been systematically looking at 28 percent tax bracket and rationalising certain items out of that bracket into the lesser categories, mostly 18 percent but in some cases even less.Arun Jaitley, Finance Minister
Will Pass On Lower Rates To Consumers, Says Jyothy Laboratories
Welcoming the reduction in daily consumption items such as detergent and dish wash, Ullas Kamath, joint managing director at Jyothy Laboratories said this will help enhance consumption and improve customer sentiment.
Prior to GST implementation, the tax slab for Jyothy Laboratories was at 21 percent and post GST it has come down to 17 percent. A reduction of 4 percentage points will be passed on to the consumer in entirety. This move will also add further uptick in rural demand which showed signs of improvement in Q2. Due to the easy GST compliance processes by the government we will also see a lot of unorganized players shifting to organized sector leading to a healthy competition and more choice for the consumers.Ullas Kamath, Joint Managing Director, Jyothy Laboratories
Ensure GST Rate Reduction Benefits Passed On To Consumers, Says Khaitan
With the rate reduction on a plethora of products, the next step of the government should be to ensure that the benefit of the rate reduction goes to the consumers. It appears that after this mass rate reduction various anti-profiteering problems may kickoff for businesses which would not pass on the benefit to the consumers.Abhishek Rastogi, Partner, Khaitan & Co.
Rates Of Items In 18% And 12% Slabs Also Cut, Say State FMs
Assam Finance Minister Himanta Biswa Sarma said rates on more items have been “lowered from 18 percent to 12 percent and 5 percent”.
Kerala Finance Minister Thomas Isaac also told reporters that rates of items in the 12 percent slab have been reduced to 5 percent.
Will Make Up For Revenue Shortfall, Says Drabu
The government will make up Rs 22,000 crore GST revenue forgone, Jammu & Kashmir Finance Minister Haseeb Drabu said.
AC And Paint Makers Say Decision Was Expected
Air condition maker Blue Star told BloombergQuint that the GST Council’s decision to retain the 28 percent tax slab was largely expected. Any reduction in rates would have kick-started the market, Joint Managing Director B Thiagarajan said over the phone.
Paint maker Kansai Nerolac said the company “will have no choice” but to pass on the burden to the consumer if costs increase.
Revenue Loss: Rs 20,000 Crore
The GST Council decided unanimously that only sin goods should remain in the 28 percent tax bracket Sushil Modi told reporters. He sees a revenue loss of Rs 20,000 crore after the number of goods in the highest tax bracket was pruned to less than one-fourth.
23rd GST Council Meeting Lowers Rates On Several Items In 28% Tax Bracket
The Goods and Services Tax Council today lowered rates on more than three-quarters of 227 products originally taxed at the highest 28 percent.
Rates on 177 items were brought to 18 percent, Bihar Deputy Chief Minister Sushil Modi told reporters in Guwahati where the council is meeting today. These include mass consumption products like chocolate, chewing gum, aftershave, beauty products, powder, detergent and marble.
Only 50 remain in the highest tax slab. The Council unanimously retained air conditioners, washing machines, paints and cement in the 28 percent bracket, Modi said.