"There are many luxury and sin goods which would be taxed at a higher rate and under that premise, a rate of 28% was agreed upon by the council". The GST Council may also announce new incentives for small and medium enterprises (SMEs) in order to encourage digital transactions.
The 23rd GST Council meeting got underway in Guwahati on Thursday evening while the opposition Congress agitated outside the venue protesting the negative impact of GST on small businesses, poor and marginalised sections of the society.
Also, eating out at hotels, which has room tariff of more than Rs. 7,500, should attract a uniform 18 per cent tax rate instead of any separate category for 5-star hotel, the GoM recommended. R. Muralidharan, senior director, Deloitte India, said the council needs to review the list of goods in 28% slab and bring some of the deserving items to 18% besides changing the return period to quarterly from monthly till the GSTN system stabilizes. Wooden furniture is handmade by unorganised sector artisans and is mostly used by middle class families and there have been demands for lowering tax incidence on them.
A panel, headed by Assam Finance Minister Himanta Biswa Sarma, had suggested doing away with the tax rate distinction between AC and non-AC restaurants not covered under the composition scheme.More news: Uber, NASA team to put air taxis in sky by 2020
Officials have said that items now being taxed at 28 per cent will be looked into. At present, while manufacturers pay GST at 2 per cent, the rate for restaurants is 5 per cent. Traders now pay 1 per cent.
Prime Minister Narendra Modi said if there is consensus at the next GST council meeting due over November 9 to November 10, the government would take the necessary steps to help traders and strengthen the country's economy. Other items in the same tax basket include shower baths, sinks, wash basins, bidets, lavatory pans, seats and covers, flushing cisterns and similar sanitary ware of plastics.
The GST Council in the last 3-4 meetings has slashed rates on over 100 items.