GST council meet: These categories saw reduction in rates
While providing relief to exporters and SMEs, the GST council also changed the tax rate for a number items involving medicines, stationary items, packaged foods and handicrafts, etc.
The Goods and Service Tax Council (GST Council) was chaired by Finance Minister Arun Jaitley on Friday to discuss a special package for the micro, small and medium enterprises (MSMEs) and exporters.
While exporters and SMEs received some sign of relief during this meet, there were also number of items such as packed food items and medicines which saw massive reduction in their Goods and Services Tax (GST) rate.
Stationary items along with diesel engine parts saw their GST rate to be at 18% from previous 28%.
Not only this, job work items will now be charged at GST rate of 5% from previous 12%. Similarly, unbranded ayurvedic medicines will have GST rate of 5% from 12%.
While packaged foods like khakra and unbranded namkeen, GST rate has been reduced from 12% to 5%.
Jaitley has also decided to decrease man-made yarn at 12% GST rate from previous 18%.
Haseeb Drabu, Jammu & Kashmir Finance Minister had asked to reduce GST rate on AC restaurents to 12% with no ITC (input tax credit). Adding he said, "GST on works contracts for Government reduced to 5% from 12%.
Jaitley said "A group of ministers will relook tax on AC restaurants."
Furthermore, eating out may also become cheaper with the GST council in-principle agreeing to reduce the GST rate from the current 18% to 12 % . The government has been asked to submit a report within 14 days to understand the full impact of these revisions.
As for industry and exporters, threshold limit for compensation scheme have been increased to Rs 1 crore from the current Rs 75 lakh to ease in a move to ease tax filing.
Now GST rate will be at 2% for manufacturing companies under the composition scheme, 5% tax for restaurent business and 1% tax for traders.
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