The GST Council in its 28th meeting cut tax rates on several general-use items such as TV, washing machine and refrigerators. The new rates would come into effect from July 27.
The rate reductions is estimated to cost the government exchequer nearly Rs 7,000 crore.
Over the last one year, the Council, chaired by Union Finance Minister and comprising state ministers, has slashed rates in 191 items.
Now, only 35 goods are left in 28% tax bracket. The Council brought down tax rates to 18 percent from 28 percent on 15 items.
Reacting to the decision, FICCI President Rashesh Shah said the decisions taken by the GST Council since the implementation of GST to bring continuous improvement and simplification in the GST regime are commendable.
“The rationalization in rates of various items in the meeting yesterday would benefit the nation. The decisions relating to the simplification of returns and especially keeping the interests of small taxpayers are noteworthy. This would facilitate ease of doing business both for small and large taxpayers,” added Shah.
Many of the recommendations made by FICCI have also been approved by the GST Council and would go a long way in strengthening the confidence of the taxpayers under the GST regime.
These decisions would indeed increase compliance, widen the tax base and are in the right direction to achieve the objectives of GST, said Shah.
Mr. Mahesh Anand, President – Nippon Paint (India) Private Limited (Decorative Division), and Vice-President of the Indian Paint Association said, “The GST council’s recent recommendation for the reduction in paint rates from the existing 28% to the revised 18% is a very thoughtful move which is welcomed wholeheartedly. The Indian paint market is expected to reach Rs.70,875 crore by 2019-20 according to the Indian Paint Association. The reduction in GST will accelerate the expected growth. This step is a reprieve for the paint industry and its consumers as the high GST rate on paint had added to the consecutive price hike caused by a surge in the cost of raw materials, the last few years.”
“This decision will augur well for the industry as the consumption will subsequently rise. Nippon Paint will reduce its prices in accordance with the revised GST rates to the benefit of the customers. This rationalization of rates will potentially encourage sales to go up by 12-14% in the decorative segment.” Mr. Anand mentioned.