The GST rate cut on 178 items will be applicable from today, which will make several commodities cheaper, including eat out as GST rates on restaurant will now stand at 5%, instead of previous 18%. The decision to cut tax slabs were taken at the GST council meet in Guwahati last week.
Union Finance Minister Arun Jaitley and the Central government has been facing Opposition flak over the roll-out of the GST. Even BJP-ally Shiv Sena has criticised the government.
After the pruning of rates, taxes on 13 items will be lowered from 18% to 12%, on 6 items from 18% to 5%, 8 items from 12% to 5% and 6 items from 5% to zero tax slab. Tax rates on restaurants irrespective of AC or non-AC has been slashed to 5% from earlier 18%.
As many as 178 items of daily use were shifted from the top tax bracket of 28 per cent to 18 per cent, in an announcement made by Jaitley after November 10 GST council meet.
So far 12% GST on food bill is levied in non-AC restaurants and 18 per cent in air-conditioned ones. All these got input tax credit, a facility to set off tax paid on inputs with final tax.
Restaurants in starred-hotels that charge Rs 7,500 or more per day room tariff will be levied 18 per cent GST but ITC is allowed for them. Those restaurants in hotels charging less than Rs 7,500 room tariff will charge 5 per cent GST but will not get ITC.
Chewing gum, chocolates, coffee, custard powder, marble and granite, dental hygiene products, polishes and creams, sanitary ware, leather clothing, artificial fur, wigs, cookers, stoves, after-shave, deodorant, detergent and washing power, razors and blades, cutlery, storage water heater, batteries, goggles, wrist watches and mattress are among the products on which tax rate has been cut from 28 per cent to 18 per cent.
The top tax rate is now restricted to luxury and demerit goods like pan masala, aerated water and beverages, cigars and cigarettes, tobacco products, cement, paints, perfumes, ACs, dish washing machine, washing machine, refrigerators, vacuum cleaners, cars and two-wheelers, aircraft and yacht.
Other items on which tax rate has been cut from 28 per cent to 18 per cent include wire and cables, furniture, mattress, trunk, suitcase, detergents, shampoos, hair cream, hair dyes, make up, fans, lamp, rubber tubes and microscope.
Tax rate on condensed mil, refined sugar, pasta curry paste, diabetic food, medicial grade oxygen, printing ink, hand bags, hats, spectacles frame and bamboo/cane furniture has also been cut from 18 per cent to 12 per cent.
That on puffed rice chikki, flour of potatoes, chutney power, fly sulphur recovered in refining crude and fly ash to 6 per cent from 18 per cent.
Guar meal, hop cone, certain dried vegetables, unworked coconut shell and fish would attract nil GST tax as against 5 per cent now.
Tax on idli dosa batter, finished leather, coir, fishing net, worn clothing and desiccated coconut has been cut to 5 per cent from 12 per cent.
(With inputs from PTI)