Even with prices of key commodities in India already under upward pressure, the GST council is now said to have taken positions from states to raise tariffs on 143 items. The products on which GST rates can be increased include handbags, perfumes/deodorants, chocolates, chewing gum, leather and walnut clothing and clothing accessories.
Out of a total of 143 items, it is proposed to shift 92 percent from the 18 percent tax bracket to the top 28 percent plate, according to an Indian Express report citing sources. The 143 items include custard powder, watches, papad, suitcases, gur (cane sugar), handbags, perfumes/deodorants, power banks, color televisions (less than 32 inches), chocolates, ceramic sinks, sinks, chewing gum, walnuts, safety glasses, frames for glasses/ glasses, non-alcoholic drinks and leather clothing and clothing accessories.
Items like papad and gur (cane sugar) can be shifted from zero to the 5 percent GST plate. The GST rate for walnuts could be increased to 12 percent from 5 percent, for custard powder to 18 percent from 5 percent, and for wood table and kitchen utensils to 18 percent from 12 percent, the report said.
GST: plate changes
Meanwhile, according to reports, the GST council, the governing body for the country’s indirect tax system, could also consider a proposal in its meeting next month to abolish the five percent plate by moving some mass-consumer goods to three percent. and the remaining up to eight percent categories.
Currently there are four GST plates: 5 percent, 12 percent, 18 percent and 28 percent. The 18 percent record has 480 items, about 70 percent of which come from the GST collections. In addition, there is an exempt list of items such as unbranded and unpackaged food that are not subject to the levy. The Council may also decide to prune the list of exempt items by moving some of the non-food items to 3 percent plaque, a PTI report said.
Discussions are also underway to raise the 5 percent record to 7 or 8 or 9 percent, the report said. A final call will be made by the GST Council, made up of finance ministers from both the Center and the states, at its next meeting in May.
GST Compensation System Terminates
The GST Compensation Scheme will expire in June. Last year, the Council set up a panel of state ministers, led by Karnataka’s chief minister, Basavaraj Bommai, to propose ways to increase revenues by rationalizing tax rates and correcting anomalies in the tax structure.
The central government was mandated to compensate the states for their revenue shortfall resulting from the rollout of the GST system, for five years until June 2022. The Center had also agreed to protect the revenues of the states at 14 percent per annum. during 2015-16 base year sales.
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