The GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising ministers from all states, is likely to have approved a two-rate GST structure, involving 5% and 18% tax rates, according to sources. The rate rationalisation benefits healthcare, small businesses, textiles and pharma, as well as insurance. However, a 40% tax has been introduced on sin goods like tobacco, cigarettes, and alcohol as well as on luxury items, said the sources.
According to the sources, the GST Council has reached a cons
The Council is also likely to have approved measures to reduce the registration time for non-risky MSMEs and start-ups from the current 30 days to just three. The sources added that the risk classification will be based on parameters and data analysis by GSTN, which is the IT backbone for implementing the indirect tax regime.
The Council, in its ongoing 56th meeting, is also likely to have approved an optional simplified registration scheme with automatic approvals for businesses whose monthly tax liability does not exceed Rs 2.5 lakh.
It is also likely to have cleared the proposal to issue exports refunds within seven days, based on risk analysis, according to CNBC-TV18.
Refunds stuck under the inverted duty structure in sectors such as textiles, pharma, chemicals, and fertilisers will also be released on a provisional basis within seven days.
According to the report, small refunds up to Rs 1,000 will be facilitated through ICEGATE for faster export refund claims. Nearly 1.5 lakh shipping bills currently pending are expected to be cleared.
56th GST Council Meeting
The two-day GST Council meeting began on Wednesday, to discuss the much-awaited rate rationalisation, GST slab restructuring into two rates, and compensation cess.
The Council expected to cut rates on a large number of items from 28% to 18% and from 12% to 5%. However, the final decision of the GST Council will be announced by Sitharaman tomorrow, Thursday, September 4.
Currently, the GST regime has four slabs — 5%, 12%, 18% and 28%. Apart from this, there is a 3% slab for jewellery items.
The 56th GST Council will, over the next two days, discuss the Centre’s ‘next-gen’ GST reform proposal of having just two tax rates of 5 and 18 per cent. A special 40 per cent rate has been proposed to be levied on a select few items.
If the Council agrees to the Centre’s GST reform proposal, most of the common use food items like ghee, nuts, drinking water (20 litre), non-aerated drinks, namkeen, certain footwear and apparel, medicines and medical devices are likely to move from a 12 per cent to a 5 per cent tax slab.
Common use items, ranging from pencils, bicycles, umbrellas, to hairpins, may also move to a 5 per cent slab. Prices of electronic items like a certain category of TV, washing machine and refrigerator are likely to fall because of being taxed at a lower rate of 18 per cent, as against 28 per cent currently.
