TIL Desk/Business/New Delhi/ In the biggest GST rejig yet, tax rates on over 200 items, ranging from chewing gum to chocolates to beauty products, wigs and wrist watches, were cut to provide relief to consumers and businesses amid economic slowdown.
As many as 178 items of daily use were shifted from the top tax bracket of 28 per cent to 18 per cent, while a uniform 5 per cent tax was prescribed for all restaurants, both air- conditioned and non-AC, Finance Minister Arun Jaitley said after the GST Council meeting here. Currently, 12 per cent GST on food bill is levied in non-AC restaurants and 18 per cent in air-conditioned ones. All these got input tax credit, a facility to set off tax paid on inputs with final tax.
Jaitley said the restaurants, however, did not pass on the input tax credit (ITC) to customers and so the ITC facility is being withdrawn and a uniform 5 per cent tax is levied on all restaurants without the distinction of AC or non-AC. Restaurants in starred-hotels that charge Rs 7,500 or more per day room tariff will be levied 18 per cent GST but ITC is allowed for them. Those restaurants in hotels charging less than Rs 7,500 room tariff will charge 5 per cent GST but will not get ITC.
Chewing gum, chocolates, coffee, custard powder, marble and granite, dental hygiene products, polishes and creams, sanitary ware, leather clothing, artificial fur, wigs, cookers, stoves, after-shave, deodorant, detergent and washing power, razors and blades, cutlery, storage water heater, batteries, goggles, wrist watches and mattress are among the products on which tax rate has been cut from 28 per cent to 18 per cent. The new tax rates will be effective November 15.
The top tax rate is now restricted to luxury and demerit goods like pan masala, aerated water and beverages, cigars and cigarettes, tobacco products, cement, paints, perfumes, ACs, dish washing machine, washing machine, refrigerators, vacuum cleaners, cars and two-wheelers, aircraft and yacht. Items on which tax rate has been cut from 28 per cent to 18 per cent include wire and cables, furniture, mattress, trunk, suitcase, detergents, shampoos, hair cream, hair dyes, make up, fans, lamp, rubber tubes and microscope.
Tax rate on condensed mil, refined sugar, pasta curry paste, diabetic food, medical grade oxygen, printing ink, hand bags, hats, spectacles frame and bamboo/cane furniture has been cut from 18 per cent to 12 per cent. That on puffed rice chikki, flour of potatoes, chutney power, fly sulphur recovered in refining crude and fly ash to 6 per cent from 18 per cent.
Guar meal, hop cone, certain dried vegetables, unworked coconut shell and fish would attract nil GST tax as against 5 per cent now. Tax on idli dosa batter, finished leather, coir, fishing net, worn clothing and desiccated coconut has been cut to 5 per cent from 12 per cent. “Consumers will be benefited by lower prices as most of the taxable items are in the 5 per cent, 12 per cent or 18 per cent slabs,” Jaitley said.
