The Centre on Wednesday gave a green signal to the revised rates on goods and the same will get effective from November 15. The government has made it clear that the process of the concerned products should showcase the changes.
“A consumer shall be charged the revised reduced rates of 18% on these items with effect from the 15th November, 2017. On 178 items the GST rate has been brought down from 28% to 18%,” said the government in a release. “Accordingly, there would be a corresponding reduction in price/MRP on these goods. Consumers may take note of these reductions while making purchases.”
Last week the GST Council had its meeting where they reduced the number of items which rest in the highest tax slab of 28 percent to 50. Also, they chose to decrease the charges being levied on restaurants to 5 percent and eliminated their entitlement to claim input tax credits.
“Virtually all the notifications that were required based on the decisions taken in the last meeting have been issued. There is no real change in them versus the decisions announced at the end of the meeting,” said M.S. Mani, senior director, Indirect Tax, at Deloitte India.
The newest announcements have come “as a huge sigh of relief for businesses both in terms of compliance as well as working capital loss,” said Abhishek Jain, Tax Partner, EY India. “In furtherance to the Government’s earlier move of exempting businesses with up to ₹1.5 crore from paying GST on receipt of advances for future supply of goods, similar exemption has also been extended to all except those who have opted for composition scheme.”
Tax consultants are of the opinion that certain issues still exist which need to be attention and government should concentrate on them. “There are several sectors that have been untouched till now,” Mr. Mani said. “For example, the car leasing companies are one of the largest employment intensive sectors in the country. Every car needs a driver, every four cars needs a technician, and every 10 cars needs a cleaner. The majority of corporates go for car leasing. These leasing firms have to pay tax at 28% without input tax credit. This is just one example.”