Home » Taxation » GST » GST council to review 28% tax slab: GST Meet

GST council to review 28% tax slab: GST Meet

Another Goods and Service Tax council meeting took place on 11th November in Guwahati, Assam, where the GST council is all set to cut out some of the common use items by SMEs (Small and Medium Enterprises) from the highest tax slab i.e. 28% to a lower tax slab.

In the reconsideration of 28% tax slab, the tax rate fitment committee has decided to shift the decided items on a lower tax slab of 12% or 18% as the council wants to address the public issues regarding high tax rate i.e. 28% of certain items of common use such as ceiling fans, cement, automobile components, electrical fittings, sanitary fittings, shaving cream, cases for spectacles, goggles etc.

And also to provide some relief to the SMEs, which are labour – intensive. And according to the Ministry of micro and small and medium enterprises, India is home to nearly 56 million SMEs.

Besides, SMEs contribute only about 5% to the total indirect tax revenue. Hence giving relief to them may not hit revenue collection. The idea is to ease the pain, not to dilute GST structure.
says a member of the Ministry of Micro and Small and Medium Enterprises.

According to the revenue department 80% of the tax payers contribute only 20% of tax revenue whereas, the remaining small section of the assessee account for the big share of tax proceeds.

Regarding the matter, another official says

The same product may be manufactured by large industry players as well as SMEs. In such cases, a rate cut will affect revenue receipts from the bigger players too altogether they need no such relief.

He also added that

the eventual goal is to retain only so – called sin goods such as cigarettes, the consumption of which the state wants to discourage, in the highest tax slab. However, the pruning of the items in 28% slab may be a gradual exercise as the GST council has to also take into account revenue considerations as tax evasion is common in the country.

Leave a comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

UPTET Admit Card Railway Result