Economy

GST Council May Consider 5% Tax Rate On Under-Construction Houses

GST Council May Consider 5% Tax Rate On Under-Construction Houses

The GST Council on Saturday cut rates on 23 commonly used goods and services, including TV screens, video game consoles, digital cameras, video camera recorders, and power banks. Major construction material, capital goods and input services used for construction of flats and houses attract 18 percent GST, while cement attracts 28 percent tax.

Services supplied by banks to basic savings bank account and Jan Dhan accounts will be exempt from GST. Following the decision, only 28 items remain in the 28 per cent bracket of the GST.

The annual revenue implication of the rate cuts would be Rs 5,500 crore, Finance Minister Arun Jaitley said.

CAIT Secretary General Praveen Khandelwal said that the reduction in GST tax rates will on one side lower the cost of production of a large number of items and on the other hand will make consumers more comfortable.

The meeting, chaired by Union Minister Arun Jaitley, moved six items from the 28% tax bracket to 18%, PTI reported.

"The statement of the Prime Minister made just before the GST Council meeting undermines the constitutional authority of the GST Council as it pre-empts the decision-making authority of the council", Mitra had alleged.

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The new tax rates will come into effect from January 1, 2019. They are now brought into 18% Slab. "After the meeting, Puducherry Chief Minister V Narayanasamy said that "(Many) items have come down from 18% to 12% and 5% as they are common man's consumption goods". "There is a consensus that something needs to be done on this".

While the GST on third party motor vehicle insurance has been cut from 18 to 12 oer cent, cinema tickets up to Rs 100 have also been granted a similar reduction. GST rates have been reduced on 32-inch TV.

It was decided that new return filing system will be introduced on a trial basis from 1st April 2019 and on mandatory basis from July 2019.

"The Council has approved the proposal to form a seven-member GoM to study the revenue trend, including analysing reasons for structural patterns affecting revenue collection in some of the states", Jaitley said.

"Considering the volatility in the worldwide crude oil prices, petroleum products should also be considered under the GST to rationalise the impact of indirect taxes by subsuming VAT (Value Added Tax) and excise duties in GST", the industry body said in a statement quoting Talwar.

The GST Council has also chose to set up a centralised Authority for Advance Ruling to hear those cases in which two divergent verdicts have been passed by AARs of two different states.