The Goods and Services Tax Council on Thursday decided to slash the GST rate on 54 services and 29 items, including old and used motor vehicles, public transport buses run on bio-fuels, sugar-boiled confectionery and packaged water, but could not finalise measures for simplification of the GSTN returns.
The much-talked about demand for bringing petroleum products within the ambit of GST did not come up for discussion on Thursday. The issues will be taken up at the next meeting, Finance Minister Arun Jaitley told media persons after the GST Council meeting here.
‘Vibhuti’ (sacred ash), parts and accessories for manufacture of hearing aids and de-oiled rice bran have been exempted from GST while all types of old and used motor vehicles other than medium and large cars and SUVs will now attract 12 per cent instead of 28 per cent GST. Old medium and large cars and SUVs will attract 18 per cent instead of 28 per cent.
The rate on sugar-boiled confectionery, drinking water packed in 20 litre bottles, fertiliser-grade phosphoric acid, bio-diesel and drip irrigation system have been reduced from 18 to 12 per cent.
Tamarind kernel powder, mehendi paste in cones and domestic LPG supplied by private distributors will attract a reduced duty of five per cent instead of 18 per cent.
The exemptions from GST will, among other things, now apply to supply of services for providing information under RTI Act, legal services provided to government, local authority, governmental authority and government entity, transportation of goods from India to outside by air and sea, services relating to admission or conduct of examinations provided to all educational institutions, entrance fees for entrance examination and for transportation of students up to higher secondary schools.
GST has been reduced from 18 to 12 per cent on construction of Metro and monorail projects, while on tailoring services it has been brought down from 18 per cent to five per cent. Admission to theme parks, water parks, joy rides, merry-go-rounds, go-carting and ballet will now be taxed at 18 per cent instead of 28 per cent and on common effluent treatment plans services from 18 per cent to 12 per cent.
Jaitley said the decisions on changing the tax rates were taken on the recommendations of the fitment committee and the changes will come into force from January 25.
Talking about simplifying GST return filing, Jaitley said the Group of Ministers under the Council, officials of GST Network and Nandan Nilekani, Infosys Chairman, held a meeting on the issue. Infosys is the service provider of GSTN.
GSTR 3B return filing will continue and all buyers and sellers will continue to load their invoices.
Initially there will be 3B return and the supplier invoice would be adequate. The Council felt that once the GoM, IT Committee and Nandan Nilekani discuss the matter and formalise it, then it will be circulated among the ministers and approval will be taken during the next GST Council meeting.
The next GST Council meeting will be held via video conferencing soon.
The Council also reaffirmed that from January 15 e-way Bill system has started operating on a trial basis. “From February 1 inter-state e-way bill will be necessary. Fifteen states have said that from February 1, intra-state, they will also start e-way bill.”
The Finance Minister said the Council also reviewed GST collections. “So far we have been relying on unilateral declaration of traders itself. It is necessary to bring in some anti-evasion measures.”
He also said that the Composition Scheme was seriously discussed. “Collection was a matter of concern. Seventeen lakh dealers who have registered themselves at 1 per cent have only deposited Rs 307 crore in the first quarter. The scheme has not been enthusiastically responded. Most of the people have registered themselves below Rs 20 lakh. There seemed to be cases of under-declaration.”
He said that of the money collected under Integrated GST, a sum of Rs 35,000 would be provisionally divided between Centre and the states.
Bihar Finance Minister and deputy Chief Minister Sushil Kumar Modi said the remaining Rs one lakh crore would be settled on a future date.
On direct collections, Jaitley said the government was way ahead of the direct with taxes growing at 18.7 per cent.
Asked about the Congress demand for inclusion of petroleum products in the GST, the Finance Minister said it did not come up on Thursday. It will be discussed in the next meeting, he added.
Punjab Finance Minister Manpreet Singh Badal said that when the GST was brought in, there was a lot of hype that it will contribute to growth in GDP and tax collections but after eight months the GDP and revenue collections had actually come down.