"All items of common consumption have been reduced from 28 per cent to 18 per cent tax rate". The move comes after govt faced huge pressure from opposition-ruled states over keeping mass used goods in the 28 per cent bracket.
A letter from the Finance Ministers of the Congress-ruled States to Mr. Jaitley, who heads the Council, would set the tone for discussions in the meeting.
"The GST Council has chose to keep only 50 items, mostly demerit, sin and luxury goods in top 28% bracket", Modi added. Bulk of the goods in the 28 per cent tax slab has been brought down to 18 per cent bracket. The initial 18% tax rates for air-conditioned restaurants and 12% for non air-conditioned restaurants were slashed to 5% GST on all food items from November 15.More news: Twitter Halts User Verification, Saying It's 'Broken'
The rate of GST in case of eight items have been reduced to five per cent from existing 12 % and in case of six items it has been reduced to nil from existing six per cent.
Businesses with annual turnover up to Rs. 1 crore can opt for the composition scheme, which enables them to pay tax at a flat rate without input credits. At the same time, it was made a decision to do away with the existing Input Tax Credit (ITC) benefit provided to the restaurants as the benefit was hardly passed on to the customers.
The Congress had demanded a cap of 18 per cent for all taxes under the Goods and Services Tax regime. Outdoor catering will attract 18 per cent GST with input tax credit benefits.More news: American basketball players suspected of shoplifting in China confined to hotel
The estimated revenue loss from the reduced items in high tax bracket is expected to be Rs 20000 crore annually, Modi said.
A large number of taxpayers were unable to file their returns in FORM GSTR-3B within due date for the months of July, August and September, 2017.Late fee was waived in all such cases, the council said.
"The Congress wanted to implement the Goods and Service Tax".More news: The Dark Universe loses two more key players