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