New Delhi: The
GST Council may reduce the rates on sanitary napkins, handicraft and handloom products, besides certain services, at its meeting next week.
Several industry bodies and stakeholders have been demanding duty cut on items, especially those linked to health and employment in the unorganised sector.
"The council will take up the issue of rationalisation of taxes on various commodities in view of the demand raised by stakeholders. It would focus mainly on those items which are of general consumption and have low revenue implication," an official said.
Most handloom and handicraft products as well as sanitary napkins are currently taxed at 12 per cent despite a demand to exempt them from the levy.
Under the goods and services tax regime, there are four rates - 5 per cent, 12 per cent, 18 per cent and 28 per cent.
Since its launch on July 1, 2017, the GST has subsumed over a dozen local levies and transformed India into a single market with a seamless flow of goods.
The GST Council had, in its meeting in January this year, decided to slash the GST rate on 54 services and 29 items.
At its November 2017 meeting, the council had removed 178 items from the highest 28 per cent category, while cutting the tax on all restaurants outside starred-hotels to 5 per cent.
In the first year of the GST in 2017-18, the government earned Rs 7.41 lakh crore from the tax since July. The average monthly collection was Rs 89,885 crore.
In the current fiscal, the collections in April touched a record Rs 1.03 lakh crore, followed by Rs 94,016 crore in May and Rs 95,610 crore in June.
Sugar cess
A ministerial panel has suggested reducing the GST on ethanol to 12 per cent from 18 per cent but is not in favour of imposing cess on sugar as the arrears to cane farmers are already declining.
The group of ministers, headed by Assam finance minister Himanta Biswa Sarma, will wait for the attorney general's opinion before taking a view on whether cess can be levied at all under the current GST regime, said officials.
The GoM would meet on July 20 to take a call on the issue, a day before the Council meeting.
In case AG's opinion is favourable, GoM may look at the option of levying one per cent agriculture cess on luxury goods which could imposed to deal with any unforeseen circumstances in the farm sector.
Officials said the panel is likely to recommend lowering GST rate on ethanol to 12 per cent GST, though food ministry had been batting for 5 per cent rate.
Briefing reporters after the GoM meeting today, Sarma said that after fixing the Minimum Support Price (MSP) for sugar, at Rs 29 a kg, the arrears due to cane farmers have come down by Rs 5,000 crore to Rs 18,000 crore.
"Considering this positive development, we do not think there is a case for levying cess on sugar at the moment," Sarma said.
The Union Cabinet had last month cleared a bailout package of over Rs 8,000 crore for the sugar industry to help the cash-starved mills to clear dues to farmers. It had also fixed a MSP of Rs 29 a kg.
With regard to the general issue of levying cess, an official in the GST Council said that it had earlier sought AG's opinion on its legality keeping in mind the architecture of the GST which subsumed all cess, surcharge, taxes and other levies.
Source: telegraphindia.com