Govt cuts GST rates of 177 items in 28% tax slab

The Dollar Business Bureau

The GST Council, in its 23rd meeting on Friday, has decided to cut rates from 28% to 18% for 177 items - from detergents to chewing gums.

“The all-powerful GST council pruned the list of items attracting the top 28% tax rate to just 50 from 227 previously, Bihar Deputy Chief Minister Sushil Kumar Modi told reporters in Guwahati.

The council, headed by Finance Minister Arun Jaitley, cut the list of items to 50 as against 62 items as recommended by the fitment committee.

“There were 227 items in the 28% slab. The fitment committee had recommended that it should be pruned to 62 items. But the GST Council has further pruned 12 more items,” Modi said.

He further said that all types of chocolates, chewing gum, shaving and after-shave items, washing powder detergent, shampoo deodorants, preparation for facial make-up and marble and granite will now attract a tax rate of 18% instead of 28%.

“It was unanimously decided that there should be only demerit and sin goods in 28% slab,” he said.

“So, today the GST Council took a historic decision, that in the 28% slab there will be only 50 items and the remaining items have been brought down to 18%,” he added.

However, the tax rate for luxury goods such as air conditioners, washing machines, and also cement and paints have been retained at 28%.

With the decision taken by the Council to cut the tax rate, there will be a revenue loss of Rs.20,000 crore per annum to the Government.

“There is consensus that slowly 28% slab should be brought to 18%. But it will take some time because it has a big revenue implication,” Modi said.

The Goods and Services Tax (GST), which was rolled out from July 1, has tax slabs of 5%, 12%, 18% and 28%.