India: GST council’s 20th meeting: Rate on textile job works, tractor parts lowered

The Goods and Services Tax (GST) Council in its 20th meeting on Saturday decided to cut the tax rate for job work for the entire value chain of textiles sector to 5 per cent along with reduction in rate for tractor parts to 18 per cent from 28 per cent. Also, the Council gave in-principle approval to the e-way bill rules, which envisage a technology-driven tracking of movement of goods worth more than Rs 50,000 and for sale beyond 10 km in distance. The e-way bill rules are likely to come into force from October 1.

 “Ek bada vishaye tha job works ka textiles pe. Consensus ye bana ki throughout the textile chain jisme keval textile hi nai, apparels, shawls, carpet jitne bhi textile related items hai unn sabb pe job work ka rate 5 per cent hi rahega (One big issue was tax rate for job work in textiles sector. A consensus was evolved that the GST rate for job work throughout the textile chain and even for textile-related items such as apparels, shawls, carpets will be 5 per cent),” finance minister Arun Jaitley told reporters after the meeting.

Earlier, the GST for job works related to textile yarns, other than manmade fibres and textile fabrics, was 5 per cent, while for manmade fibres, it was 18 per cent. The move assumes significance as the rollout of GST from July 1 had met with several protests from the textiles sector that had demanded a cut in the tax rate on fabrics, which were brought in the tax net for the first time at the rate of 5 per cent.The GST rate for government work contracts, for both central and state governments, was also cut to 12 per cent with input tax credit from the earlier decided rate of 18 per cent, Jaitley said. Under the proposed e-way bill rules, the exempted goods under GST will be kept outside its purview.

 The permits thus issued would be valid for one day for movement of goods for 100 km and in same proportion for following days. As per the draft provision, GSTN would generate e-way bills that will be valid for 1-20 days, depending on distance to be travelled — one day for 100 km, 3 days (100 to less than 300 km), 5 days (300-less than 500 km), 10 days (500-less than 1,000 km) and 20 days (more than 1,000 km). “E-way bill system will be implemented across the country. There will be no checkposts. The process will be technology-driven and human intervention would be minimised. It will be reviewed going forward,” Jaitley said.Opposing the Council’s decision, Delhi’s finance minister Manish Sisodia said that the issue was against the “fundamental concept” of GST. On Twitter, he wrote, “Have opposed idea of e-way bill in GST meeting today. It’s against the fundamental concept of GST.” In another tweet, he added, “Why we need e-way bill? GST was brought on ‘One Nation – One Tax – One Market’? We have to come out of ‘Inspector Raj’ mindset.”The Council also gave in-principle approval to anti-profiteering measures and proposal to set up a Screening Committee in 15 days to see if tax reductions after implementation of GST have been passed on to consumers. Jaitley appealed to businesses to pass on the benefit of the reduced tax under the GST to consumers, failing which the anti-profiteering mechanism will be triggered.

“The market mechanism should compel that they give benefit of input credit,” Jaitley said, hoping that there would be “minimal” use of anti profiteering provision and the provision should itself act as a deterrent.''It''s Not GST But Indian Indirect Tax'', Says Former Finance Minister ChidambaramThe Council also decided to exempt import of goods and services related to FIFA Under-17 World Cup, which will be hosted by India. For agriculture services, tax rate of post-harvest and storage has been brought down to 12 per cent from 18 per cent. Also, tax rate for entry into planetariums has been reduced to 18 per cent from 28 per cent. In case of “rent a cab service”, GST rate will be 12 per cent without input tax credit and 5 per cent with input tax credit, Revenue Secretary Hasmukh Adhia said.Besides, the norms for reverse charge mechanism have been tweaked to include aggregators who are offering small housekeeping services like plumbing or others with the liability to pay tax on them instead of service provider such as a plumber. Also, cab aggregators will have to pay 12 per cent GST if they claim input credit and 5 per cent without input credit.

On the registrations under GST, the Union finance minister said that more than 71 lakh central and state taxpayers have migrated to the GST system and another 15.67 lakh new applications for registration have been received. The Council will meet next on September 9 in Hyderabad, where it will take up the issue of many rice millers deregistering their brands to escape taxation under the GST.As per the GST rates, unbranded food items are exempted, whereas branded and packed food items attract 5 per cent rate.


Source: EtRetail.Com, India
Thursday, 11 January 2018

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