In a major revamp of the GST tax structure, the GST Council on Friday removed 178 items from the highest 28 per cent category while cutting the tax on all restaurants outside starred-hotels to 5 per cent but withdrawing input credit facility for them.
"Congress Finance Ministers will force changes in GST Council meeting today".
In a major relief to many, the GST council has made a decision to reduce tax rate on a wide range of daily use items. Value Added Tax (VAT) will continue to be charged for alcohol, which does not fall under GST.
Addressing a press conference at the end of the GST Council meet, Union Finance Minister Arun Jaitley said that the Council over the months has been pruning items in the 28 per cent list. The 23 GST Council meeting held at Guwahati restructured the GST frame and modified several tax rates for the public.
The rate of GST in case of eight items have been reduced to five per cent from existing 12 % and in case of six items it has been reduced to nil from existing six per cent. Currently, GST is levied at 12 per cent on non-AC restaurants, while it is 18 per cent for air-conditioned ones. "But the PM Modi-led government at the Centre has imposed the Gabbar Singh Tax", Rahul Gandhi said at an election rally in poll bound Gujarat. "Now, they can not avoid a debate in public domain or in the GST Council", he said.
For two items, tax slab has been lowered from 28 percent to 12 percent.
The GST Meeting also decided that there will no benefit of input tax credit for restaurants.
Ahead of the GST Council meeting, Punjab, Karnataka and Puducherry, where the Congress is in power, had jointly voiced their reservations over glitches with the GST tax-filing network, demanding that real estate and petroleum products be brought under the new regime and the tax rate be kept at no more than 18%.