GST reduction to cut prices, further revisions expected

GST reduction to cut prices, further revisions expected

The recent revision of tax rates by the GST Council may bring cheer to people.

While the GST Council, that met in Hyderabad on Saturday, revised the tax rates for as many as 40 goods, experts expect further revision in the GST slabs in coming meetings.

Among various other elements, the GST slabs of custard powder, stone inlay work, statues and other ornamental articles, pots and jars, plastic raincoats were reduced to 18% from 28%. Many experts that DH spoke to said none of these items deserved to be in the highest slab in the first place.

Some essential commodities that saw reduction in the rate slabs are walnuts (whether or not shelled), tamarind dried, roasted gram and saree fall. These items saw a downward revision of tax rate from 12% to 5%. 

"This is certainly a welcome move that sends out the signal that the Council is prepared to listen to genuine concerns. However, the GST Tariff is still unwieldy and does too much of needless hairsplitting. For instance, why should not a single rate be applied for computer monitors instead of worrying about how many inches it is? Also, is it really necessary to pick and choose 134 different types of hand made musical instruments for exemption?" Mohan Lavi, a Bengaluru-based chartered accountant suggested.

However, for simplicity of the process, Lavi suggested reduction in the entries of GST. "If GST is to turn out to be a Good and Simple Tax, the GST Tariff should comprise less than 100 entries based on industry products and with a single HSN Code for each. A comprehensive review and simplification of the GST Tariff is absolutely necessary," he said.

Anita Rastogi, partner, Indirect Tax at PricewaterhouseCoopers (PwC), India also asked for more clarity on tax rates. "It is good to see rates of many products being reduced. There are many more which the government should look at. The government should do a thorough analysis and then do a rate reduction one time. Frequent changes do not allow stability to be maintained," she said.

PwC India had recently written to the government seeking reduction in tax slabs of as many as 140 goods.

Source :  Deccan Herald


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