The Goods and Service Tax (GST) rates on many household items could change very soon depending on the decision of the GST Council which meets next on November 10. The GST is likely to consider lowering GST rate on certain common use items such as handmade furniture, plastic products and daily use items like shampoo.
There could be some good news for small and medium enterprises as the Council may offer further relief and rationalise tax rate in sectors where the total incidence of taxation has gone up because the goods were earlier either exempt from excise or was attracted lower VAT rates in the previous indirect tax regime.
The GST Council has readjusted rates for many items since the implementation the new tax regime on July 1 and further changes are anticipated. “A rationalisation of items in the 28% tax bracket is expected. Most of the daily use items could be lowered to 18%. Also tax rate on items like furniture, electric switches, plastic pipes could be relooked,” the news agency quoted an official said.
Among the top items under consideration are household items that fall in the 28% basket, such as all types furniture attract. Since wooden furniture is mostly handmade by unorganised sector artisans, with the middle class as the primary consumers, there have been demands for lowering tax incidence on them.
Other items in the same tax basket include shower baths, sinks, wash basins, bidets, lavatory pans, seats and covers, flushing cisterns and similar sanitary ware of plastics. There is a need for rationalisation of tax rates on these items, officials said.
The GST Council, which comprises of representatives of all states, have already rationalised tax rates for over 100 items. The Council has last month approved an Approach Paper to be followed by the fitment committee while deciding on future rate revisions. Under GST various goods and services have been bracketed in 5, 12, 18 and 28%.
(Source: www.businesstoday.in)
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