Movies, video games get tax cuts; GST Council leaves cement at 28%

Computer monitors TV screens video games lithiumion power banks retreaded tyres wheelchairs and cinema tickets are among products and services set to get cheaper with their removal from the GST regimess highest 28 per cent tax bracket by the GST Council on Saturday with the industry lauding the latest reductions as a boost for demandAmong the items consumed by the common man only cement continues to remain along with luxury and sin goods in the 28 per cent bracket as the Goods and Services Tax GST Council brought down the rates of all other categories of goods in a further rationalisation of rates that left only 28 items in the highest tax slabA total of 17 items and six services have been reduced which will result in a revenue impact of Rs 5500 crore for the full fiscal Finance Minister Arun Jaitley said briefing reporters here after the 31st meeting of the Council chaired by himThere are 28 items left in the 28 per cent bracket if we include luxury and sin items and items used by economically welloff sections of the society only one item of common mans usage cement remains in the bracket Jaitley saidSecondhand tyres video games monitors and television screens up to 32 inches and lithium battery power banks will now attract 18 per cent GST The GST on wheelchair accessories has been brought down to 5 per cent from the existing 28 which will also allow the payment of input tax credit that is not possible with zero tax Jaitley saidAirconditioners and dishwashers have been left untouched at the highest rate because these are not items of common use in India he said Nearly 1250 goods and services have been categorised under the four tax slabs of 5 12 18 and 28 per cent under the GST regimeThe GST Council postponed a decision to the next meeting in January on five issues taxation of residential properties extending the composition scheme for small businesses to small service providers the tax rate on lotteries raising the exemption threshold for MSMEs and on the tax to provide relief in natural calamitiesCutting the rates on cement and automobile parts would mean a combined revenue loss of Rs 33000 crore which the Council felt is too steep to be considered at this juncture Jaitley said While the GST on third party motor vehicle insurance has been cut from 18 to 12 oer cent cinema tickets up to Rs 100 have also been granted a similar reduction Movie tickets costing more that Rs 100 have been brought down from 28 to 18 per cent Its a mass entertainment medium and its revenue impact is about Rs 900 crore the Finance Minister said on the reduced tax on movie ticketsGST on solar power generating plants and renewable energy items have also been reduced he added A major decision taken was that services supplied by banks to basic savings bank deposit accounts and holders of Jan Dhan accounts will be exempt from GST The Council also decided to form a sevenmember Group of Ministers GoM to study anomalies in tax collection in some of the states which showed wide deviation from what was expected in terms of shortfallThe Council has approved the proposal to form a sevenmember GoM to study the revenue trend including analysing reasons for structural patterns affecting revenue collection in some of the states Jaitley said He noted that the average monthly collection of GST has fallen short of the target which had been set at substantially high level of 14 per cent increase compunded annuallyIn many states there is improvement collection but we have a very stiff target From the base year 201516 three increases of 14 per cent this years target would be nearly 50 per cent above the base year Falling short of the target by 510 per cent is because the target is very stiff the Union Finance Minister saidThe Council also approved the creation of a centralised Appellate Authority for Advance Ruling AAAR to deal with cases of conflicting decisions by two or more state AAARs on the same issueJaitley also announced that the Council took 16 policy decisions were taken in order to simplify processes like return filing and claim filing This major tax rationalisation ahead of the 2019 general elections comes after Prime Minister Narendra Modi recently promised to bring 99 per cent the goods under the 18 percent or lower GST slabCommenting on the development advisory multinational Deloitte said the selection of items for rate reductions appear to be influenced by the desire to minimise revenue dipsThe GST Councils decision to reduce the GST rates of certain items is a step towards keeping the indirect taxes rates at moderate level This measure will bring down the final price to consumer and is expected to encourage higher demandconsumption with consequent boost to manufacturing sector Deloitte India Senior Director R Muralidharan said in a statementConfederation of All India Traders CAIT Secretary General Praveen Khandelwal said that the reduction in rates will on one side will lower the cost of production of large number of items and on the other hand will make consumers more comfortableThe reduction in GST rates announced would certainly bring economic benefits interalia political interpretations Although a lot was expected for the real estate sector it seems the Government is taking one stitch at a time said Grant Thornton India Partner Suresh Nandlal RohiraCatch up on all the latest Crime National International and Hatke news here Also download the new midday Android and iOS apps to get latest updatesThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever