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GST Council likely to keep only luxury, demerit goods at 28 per cent

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The Goods and Services Tax (GST) Council in its upcoming 31st meeting on December 22 is likely to consider a further pruning of the peak 28 per cent slab and clarifications to remove anomalies. Officials said rate cuts are being considered for items of household use and those used in construction sector such that the 28 per cent slab will then broadly include only luxury and demerit goods.

Also, GST rate on job work for some labour-intensive services that will benefit micro, small and medium enterprises (MSMEs) could also be lowered. A lowering of GST rate for job work services such as maintenance, repair and installation (except construction) services, presently taxed at 18 per cent, could be in line with the reduction seen in August last year, when the Council had reduced the tax rate for job work for the entire value chain of textiles sector to 5 per cent. Earlier, it was 5 per cent job work related to textile yarns, other than man made fibres and textile fabrics, while for man made fibres, it was 18 per cent.

At present, 39 goods are in the topmost slab out of the total 1,211 items placed in the five broad categories of zero, 5 per cent, 12 per cent, 18 per cent and 28 per cent. Construction sector items such as marble, granite, cement and personal use items such as dishwashers, video games consoles remain in the topmost 28 per cent slab.

Source: Indian Express