GST Rate On Mass Consumption Items Cut To 18%

The Goods and Services (GST) Council on Friday decided to reduce tax rate on a wide range of mass use items – from chewing gums to detergents – to 18 per cent from current 28 per cent. The all-powerful council pruned the list of items attracting the top 28 per cent tax rate to 50 from the earlier 227 items.

In effect, the council, in its 23rd meet today, cut rates on 177 goods.

Facing intense heat from opposition-ruled states over keeping mass used goods in the 28 per cent bracket which was meant for luxury and de-merit goods, the council pruned the list to 50 as against 62 that was recommended by its fitment committee.

Implemented from July 1, the new tax regime has four tax slabs of 5 per cent, 12 per cent, 18 per cent and 28 per cent.

Now, all types of chewing gum, chocolates, preparation for facial make-up, shaving and after-shave items, shampoo deodorants, washing powder detergent and granite and marble will attract lower 18 per cent tax rate.

"There was unanimity that in 28 per cent category there should be only sin and demerit goods,” said Bihar Deputy Chief Minister Sushil Kumar Modi after the meeting. “So, today the GST Council took a historic decision, that in the 28 per cent slab there will be only 50 items and the remaining items have been brought down to 18 per cent," he said.

Paints and cement and luxury goods such as washing machines and air conditioners have been retained in the 28 per cent slab.

The decision taken by the GST council will have a revenue implication of Rs 20,000 crore annually.

"There is consensus that slowly 28 per cent slab should be brought to 18 per cent. But it will take some time because it has a big revenue implication," he said.

With inputs from Housing News