GST Council may lower rates for farm gear, EVs
The GST Council could take up rationalization of the goods and services tax (GST) rates for a handful of things at its meeting next week
These items embrace biodiesel buses, electrical vehicles, and irrigation equipment.The GST Council meeting is going to be its last one before the presentation of the Union Budget on February one.
The comparatively tiny list for rate reduction was finalized by the fitment committee earlier in the week and will be haunted by the GST Council, that is headed by the minister of finance Arun Jaitley and includes state finance ministers.
The things qualifying for rate reduction within the forthcoming meeting are picked with an objective of giving a push to agriculture and clean energy.Other things within the 28 percent tax slab won’t be concerned now with revenues yet to stabilize.
Agriculture sector growth
Agriculture sector growth is projected to fall to 2.1 percent in 2017-18 because of an expected decline within the rabi harvest and a nearly 3 percent fall in kharif production, in keeping with advance estimates by the Central Statistics office.
Since rate reductions are under the GST Council´s purview and are unlikely to make a part of the Union Budget, specific reductions for agricultural instrumentation and goods utilized by the farm sector can be thought of within the next meeting.
Considering the revenue decline for Nov, the govt. will be terribly cautious regarding additional rate reductions unless expressly secured.
In its last full Budget before the 2019 general elections, the govt. is anticipated to announce measures to spice up agriculture and tiny enterprises.Decisions associated with indirect taxes are currently taken by the GST Council.
The future minor tweaks are in stark contrast to the tax rate reduction for over 200 items in November by the GST Council in its meeting in Guwahati.Further massive scale rate reductions might need to wait for the revenue assortment objective taking center stage.
GST Council is currently moving in this direction
In earlier conferences, the GST Council had lowered the rate on tractor elements from 28 percent to 18 percent.
When rates of many things were reduced on Nov 15, it had been indicated that rates are also any rationalized by pruning the 28 percent block. It appears that the GST Council is currently moving in this direction.
This will facilitate in simplifying the seed structure.The next step can be performed by combining the 12 percent and 18 percent rates into one rate of, say, 16 percent,” said Pratik Jain, partner, PwC India.
The GST Council might also take up a proposal to cut back the rate on digital came on 18 percent from 28 percent.Companies like Nikon, Canon, and Sony had in their representations pitched for a discount in rates to safeguard the interests of a business facing stiff competition from smartphones.Besides, in most Asian countries digital cameras are taxed 717 percent, they need to be noticed.