The GST Council chaired by Indian finance minister Arun Jaitley, at its 23rd meeting, has recommended major relief in GST rates on certain goods and services, spread across many sectors and across commodities. The Council has also recommended changes in the Composition Scheme, including a uniform rate of tax @ 1 per cent for manufacturers and traders.
The Council has recommended that the list of 28 per cent GST rated goods be pruned substantially, from 224 tariff headings (about 18.5 per cent of total tariff headings at 4-digit) to only 50 tariff headings including 4 headings which have been partially reduced to 18 per cent (about 4 per cent of total tariff headings at 4-digit).
Goods on which the Council has recommended reduction in GST rate from 28 per cent to 18 per cent include articles of apparel and clothing accessories of leather, guts, furskin, artificial fur and other articles such as saddlery and harness for any animal.
The GST rate on hand bags and shopping bags of jute and cotton, hats (knitted or crocheted), and specified parts of sewing machine has been reduced to 12 per cent from the earlier 18 per cent.
Likewise, the GST rate has been lowered from 12 per cent to 5 per cent on narrow woven fabric including cotton newar (with no refund of unutilised input tax credit); finished leather, chamois and composition leather; coir cordage and ropes, jute twine, coir products; fishing net and fishing hooks; and worn clothing.
These recommendations would become effective from 00hrs on November 15, 2017.
Among the changes recommended in the Composition Scheme is a uniform tax rate of 1 per cent for manufacturers and traders (for traders, turnover will be counted only for supply of taxable goods).
The Council also recommended increase in annual turnover eligibility under this scheme to Rs 2 crore from the present limit of Rs 1 crore under the law. However, this will be implemented only after the necessary amendment of the CGST Act and SGST Acts. (RKS)
Source Fibre2Fashion News Desk – India