A single rate in the future

Finance Minister Arun Jaitley said the higher 28% Goods and Services Tax is being phased out, putting it between 12% and 18%.

“The sun is setting on the 28% slab,” he said in a Facebook post which was widely reported by media on 25 Dec 2018.

‘With the GST transformation completed, we are close to completing the first set of rate of rationalisation i.e. phasing out the 28% slab except in luxury and sin goods,” he wrote.

Of the 1216 commodities which are used, broadly 183 are taxed at zero rate, 308 at 5%, 178 at 12% and 517 at 18%.

The 28% slab is now a dying slab, he stressed.

A future road map could well be to work towards a single standard rate instead of two standard rates of 12% and 18%. It could be a rate at some mid-point between the two. Obviously, this will take some reasonable time when the tax will rise significantly, said Jaitley.

The country should eventually have a GST which will have only slabs of zero, 5% and standard rate with luxury and sin goods as an exception.

Restaurants are being levied a tax compounded under the composition of turnover at 5%.

Assessees with turnover upto Rs.20 lakhs are exempted from tax payment.

Assessees upto Rs.1 crore turnover can get a composition by paying 1% tax.

The composition scheme for small service tax assessees is under consideration.

Cinema tickets tax between 35% to 110% has been brought down to 12% and 18%. The GST has helped in controlling inflation. Evasion has also come down.

The GST Council has had 31 meetings. It is India’s first experiment with the federal institution, he said.

It is a body that has behaved with utmost responsibility, the minister assured.

Several thousand decisions, including legislative drafting, rules drafting, notifications, fixing initial rates and rationalising rates have all been taken unanimously with consensus, he pointed out. fiinews.com