The GST Council on September 3 approved a dual tax rate structure of 5 percent and 18 percent, removing the slabs of 12 percent and 28 percent, highly placed sources told Moneycontrol.
The two-day meeting of the top tax panel began on September 3 and will conclude on September 4. The 56th meeting of the Council is chaired by Union finance minister Nirmala Sitharaman and attended by her state counterparts.
The Council is likely to have cleared the reduction of tax rate on footwear and apparel priced up to Rs 2,500 to 5 percent, sources told PTI. As of now, items under these two categories are taxed at 5% for goods priced up to Rs 1,000 and at 12 percent for above Rs 1,000.
The Group of Ministers had already passed the proposal to restructure the GST regime and turn it into a two-rate system of just 5 percent and 18 percent. The new changes are likely to take effect in the next few weeks, just ahead of the beginning of the festive season.
Moreover, the Council is likely to exempt health insurance premiums from GST for senior citizens and slash rates for life savings drugs. The tax panel is also likely to bring health insurance premiums to a lower slab in boost for taxpayers.
The registration of Micro, Small & Medium Enterprises (MSME) will also get a boost with new measures likely to conclude the process within three days, sources told Moneycontrol. Currently, the process takes multiple weeks to complete.
In addition, the Council has also agreed to clear refunds stuck under inverted duty structure for textiles, pharma, chemical, fertilisers and other industries in seven days, CNBC-TV18 reported citing sources.
However, the Opposition-ruled states have asked the Centre to compensate from the likely revenue loss. Eight such states including Himachal Pradesh, Jharkhand, Kerala, Punjab, Tamil Nadu, Telangana and West Bengal and Karnataka asked for compensation, with some states asking for an estimation of the likely loss.
Source from: https://www.moneycontrol.com/news/india/gst-council-approves-5-and-18-tax-rate-structure-source-13517496.html
