25th GST Council Meet: Pre-Budget GST Rate Cut on 49 Items

The 25th GST Council Meeting has finalized a rate cut on 49 items before Union Budget in which 29 handicraft items will be charged at 0%. The council however is still mulling over taking petroleum products and Real Estate into its ambit.

E-Way Bill Mandatory from 15th Feb

Arun Jaitley in the press conference after the council meeting reconfirmed that e-way bill on trial basis will be working from January 15, 2018 and it will become mandatory from February 15 2018. Finance Minister also said that no decision has yet been made to simplify GST Return filing as of now.

FM Jaitley informed that Infosys Chairman Nandan Nilekani has made some suggestions to the council. Nilekani suggested that the buyer should upload purchase invoice and the seller should upload sale invoice so that the complex process of GSTR 1, 2, 3, B can go away.

Uttarakhand FM Prakash Pant stated that no decision has been made to take petroleum products and real estate into GST’s ambit. He said that another video conference council meet will take 10 days from now on simplification of GST filing and e-way bill.

Some Recommendations made in the 25th GST Council Meet:

• GST rate on tailoring has been reduced from 18% to 5%.
• Reduction in late fee paid under GSTR-5 to Rs 50 per day and Rs 20 per day for composition scheme holder.

Policy Changes recommended by the 25th GST Council Meeting https://t.co/iTd4ydBv6X

— Ministry of Finance (@FinMinIndia) January 18, 2018

Tax Rate Cut by GST Council

The important reduction has come in LPG cylinders where the new GST rate will be 5% which was earlier 18%. Rate of diamonds and other precious stones has been reduced from 3% to 0.25%. Apart from this parts of hearing aid, vibhuti and de-oiled rice bran is charged for NIL.

29 handicraft products have also been brought to 0% rate which were earlier charged at 18%. This is done in order to boost local handicraft industry that has been struggling since long. Other reduction has been seen in mainly motor vehicle equipment, old used motor vehicles, buses that run on bio-fuels, scientific apparatus, fertilizers and pesticides.

The reduction of GST rate on 49 items will further hit the GST collection. The collection in last few months has kept on reducing. Government is going to present the budget next month therefore it will have to keep in mind that from where they will get revenue in order to spend in budget allocation.