Big Tax Cuts

At GST Council Meet Today, Big Tax Cuts, Easier Filings Likely: 10 Points

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Four months after the government launched the new national tax, the powerful Goods and Services Tax or GST Council is expected to announce a comprehensive overhaul of rates, easing returns filing and providing more relief to small and medium businesses. The council, headed by Union Finance Minister Arun Jaitley and which has as members finance ministers of states, wraps up a two-day meeting in Assam’s Guwahati today and is expected to slash GST rates for over 200 items, including daily use products, by shifting them from the highest 28 per cent GST slab to lower slabs.

Here is your 10-point cheatsheet to this story:

  1. The meeting, the council’s 23rd, is deliberating on suggestions made by a panel headed by Assam Finance Minister Himanta Biswa Sarma. A decision could also be taken on lowering tax rates on food served in air-conditioned restaurants to 12 per cent, down from 18 per cent.
  2. The council is also reviewing the need to file three income tax returns every month in a bid to make the filing cycle more taxpayer friendly.
  3. Over 200 daily-use items could get cheaper with the council expected to reduce GST on them from 28 per cent to 18 per cent. These include shampoo, plastic products, sanitary ware, suitcases, paper, stationery, watches and musical instruments.
  4. Finance Minister Arun Jaitley had earlier this week hinted at bringing down the number of products in the 28 per cent GST slab, saying some items should never have been taxed at the highest rate. “We have been gradually bringing them down. The whole idea is, as your revenue collections neutralise we must prune it and that is the pattern in which the Council has so far been functioning. I see that as a future guide as far as the Council is concerned,” Mr Jaitley said.
  5. The GST Council has been meeting every month since the new indirect tax regime was launched on July 1 and has already rationalised tax rates for over 100 items. Under GST, goods and services are taxed in four brackets — 5, 12, 18 and 28 per cent.
  6. Today’s GST Council meeting comes amid criticism of the government’s implementation of GST, the country’s biggest tax reform since Independence. Opposition parties have alleged that the timing and implementation of GST has brought small traders and business to their knees.
  7. Congress leaders including Puducherry Chief Minister V Narayanasamy, Punjab Finance Minister Manpreet Singh Badal and Karnataka Agriculture Minister Krishna Byre Gowda led protests outside the Guwahati hotel where the meeting is being held and alleged that all but five states have reported revenue losses after the launch of GST.
  8. The Congress has accused the BJP-led government of not heeding their warnings earlier and agreeing to review the GST rates now only with an eye on next month’s crucial assembly elections in Gujarat, where the important voter group of small traders is upset with the new tax regime.
  9. Congress vice president Rahul Gandhi has in an aggressive campaign in Gujarat labelled GST as the “Gabbar Singh Tax” (after the villain in famous Bollywood film Sholay) and urged the state’s traders to reject the BJP, which has ruled the state for the last 22 years. The notes ban and GST, the Congress leader said, are “twin torpedoes” that have “killed the economy.”
  10. Prime MInister Narendra Modi has used his public meetings in Gujarat to emphasise the long-term gains that are expected of demonetisation and the GST, and has said those who oppose them are weakening the cause of fighting corruption.

Don’t Miss: Don’t Blame Note Ban and GST, It’s a Six-Year Structural Slowdown

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