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Luxury Goods Like Tobacco to Attract 28% GST; 150 Items to Get Cheaper

In a meeting held on Friday in Guwahati, GST council decided to drop items used by common man from the highest tax slab and lower their taxes to 18%.

News18.com

Updated:November 10, 2017, 2:57 PM IST
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Luxury Goods Like Tobacco to Attract 28% GST; 150 Items to Get Cheaper
(Network18 Creatives)
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New Delhi: In what can be deduced as the biggest re-jig in GST rates, only 50 out of more than 200 items have been retained in the 28% rate slab. Luxury items and goods such as tobacco are the ones that will attract 28% tax from now on.

In a meeting held on Friday in Guwahati, GST council decided to drop items used by common man from the highest tax slab and lower their taxes to 18%.

GST council largely consists of state finance ministers headed by central finance minister Arun Jaitley.

Bihar Deputy Chief Minister Sushil Kumar Modi, who is also a member of the GST Council, said goods used by common man have been removed from the 28% slab. “Only luxury goods and items such as tobacco and cigarettes have been kept in the 28% slab."

The Rate Fitment committee had proposed keeping 68 items in the bracket. Pruning this tax bracket may result in revenue loss of Rs 20,000 crore. The government seems to have gone a step further.

The Group of Ministers (GoM) had also suggested that eating out at hotels that have room tariff of more than Rs 7,500 should attract a uniform 18 per cent rate instead of any separate category for a 5-star hotel, which currently falls under the 28% bracket. With regard to traders, the GoM came up with a two-pronged approach for taxation under the composition scheme. It suggested that traders who want to exclude sale proceeds of tax-free items from turnover can pay 1% GST.
However, for those who pay tax on total turnover, the tax rate has been proposed at 0.5%.

Criticising the move, former finance minister Yashwant Sinha said on Friday, “India's FM did not apply mind while implementing GST.” He was in Patna addressing a symposium organised by JDU dissident Uday Narayan Chaudhary.


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