GST rates: Gold 3%, shoes 5%, beedis 28%

The Goods and Service Tax (GST) Council on Saturday cleared tax rates and pending rules, including transition provisions and returns, in the final lap. With all states agreeing to a July 1 roll-out, all roads are cleared for the new indirect tax regime.

Council has revised the rules to ease compliance for taxpayers.

The GST Council has decided to tax gold and gold jewellery, along with silver and diamonds, at 3 per cent, creating a new tax slab. Rough diamonds to be taxed at, for audit trail only, the nominal rate of 0.25 per cent. The footwear of less than Rs 500 to be taxed at 5 per cent and all other footwear categories taxed at 18 per cent rate. All biscuits will be taxed at the rate of 18 per cent.

Beedis Patta will be taxed at 18 per cent and Beedis at 28 per cent without cess. Yarn to be taxed at 5 per cent and man-made textiles, at 18 per cent.

Finance Minister Arun Jaitley, who chaired the 15th meeting of the GST Council, explained the decision of council meet on GST rate, “Packaged food items sold under registered trademarks to be taxed at 5 per cent.”

“The government’s decision to apply 3 per cent GST on gold is an encouraging step in the current context to stabilise the industry and address the concerns of the millions employed in the industry. Together with the customs duty of 10 per cent, the total tax on gold is still high and will continue to have an impact on the jewellery industry,” Somasundaram PR, Managing Director, India, World Gold Council, said.

Fabric will be taxed at 5 per cent rate. Readymade apparel will be taxed at 12 per cent and apparel priced below Rs 1,000 at 5 per cent.

Agriculture machinery will be taxed at 5 per cent whereas Jute will not be taxed in GST regime.

Final rates would be notified under the statute subsequently.

The finance minister has confirmed that a committee is to be setup for monitoring the anti-profiteering element, under which profit needs to be passed on to consumers, detailed rules on these aspects may come later.

Rule of accounts, record rules and easy bills will be discussed in the next GST Council meeting. Jaitley said, “The Council will again meet on June 11,” before the roll-out of the new tax regime.

Sumit Dutt Majumdar, former chairman of CBEC, apex body of Indirect tax, said the rates as finalised on Saturday won’t be inflationary. “With the revised formats of tax returns this time, I seriously doubt the ability of the GSTN to deliver on return processes and invoice matching by July 1; they might postpone return filing and invoice matching by a few months and start GST without these from July 1. But the problem will be that, going by the GST laws, credits taken provisionally by the taxpayers will not be finalised without invoice matching,” he said.

The Council has given big relief to taxpayers, in the newly revised rules. Now, if Invoice is raised in the same month in which the advance is received, then there is no need to report both the transactions separately. Earlier, it was required to report the advance separately and then subsequently report again when the supply took place, thereby resulting in dual reporting of the same transaction.

“Dealers are now not required to report invoice wise HSN code details, but only a summary of HSN details needs to be reported in the GST Returns,” said Harpreet Singh, Partner, Indirect Tax, KPMG India, to DNA.

State finance ministers and GSTN has given the assurance about the readiness of implementing GST from July 1, the onus now lies on the industry to prepare their IT infrastructure to align with the GSTN. Now industry to gear up their IT systems for meeting reporting requirements for filing returns on the GSTN portal.

Rajeev Dimri, leader, Indirect Tax, BMR & Associates LLP, said, “Although there is no update regarding an increase of deemed credit from 40 percent, planning a business transition to GST with the help of transition rules should now be on the agenda for all businesses.”

All states have agreed to the July 1 roll-out timeline. “Transition rules have been cleared, and everybody has agreed for July 1 roll-out,” Kerala Finance Minister Thomas Isaac said after the Council meeting in New Delhi.

Every manufactured product and conceivable service will have to be taxed under the rates ranging from nil to 28 per cent. The GST Council has last month fixed the rates for over 1,200 goods and 500 services — at the slabs of 5, 12, 18 and 28 per cent. Petroleum products, property and alcohol, have not been included in GST. These products will be taxed by states like earlier.


Source: DNA

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