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New Delhi, Tax rates for 66 items, including kitchen staples like pickles, under the ensuing GST regime were today slashed to meet demands from various quarters. Within weeks of the all-powerful GST Council categorising over 1,200 items into one of the 5, 12, 18 and 28 per cent tax slabs, there were complaints about high tax incidence on various goods and services.
The Council, which met today, took up demands for revision in tax rates of 133 items, but reduced the tax only for 66, including ‘agarbatti’, computer printers, cashews, children’s drawing books and schoolbags.
In a relief to SMEs (small and medium enterprises), the Council increased the threshold of turnover for businesses (which can opt for the composition scheme) to Rs 75 lakh from Rs 50 lakh proposed earlier. The composition scheme provides for an easier method to calculate tax liability and allows GST registration for dealers with a turnover below the compounding cut-off. Now, traders, manufacturers and restaurant owners with a turnover below Rs 75 lakh can pay tax at 1, 2, and 5 per cent, respectively.
As per the revised tax rates, movie tickets costing up to Rs 100 will attract 18 per cent tax, as against 28 per cent proposed earlier. Packaged food items like fruit and vegetable products, pickles, ketchup, mustard sauce, topping spread, instant food mixes and chutney, will attract 12 per cent GST as against 18 per cent proposed earlier. Also, tax rates on cashew nuts have been cut to 5 per cent from 12 per cent.
Meanwhile, West Bengal Finance Minister Amit Mitra cautioned against rolling out the world’s largest fiscal reform in haste and pleaded that it be deferred by a month.
The government aims to roll out the GST regime from July 1.
