GST rates slashed on 23 items

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- Addressing media, finance minister Arun Jaitley said 28% slab rate is only applicable on 34 items now.

GST on monitors and television screens, tyres, power banks of Lithium-ion batteries down from 28% to 18%.

"The GST on wheelchair accessories has been brought down to 5 per cent from the existing 28, which will also allow the payment of input tax credit that is not possible with zero tax", Jaitley said. GST on movie tickets costing up to Rs 100 cut to 12 per cent, from 18 per cent, tickets over Rs 100 to attract 18 per cent GST, against 28 per cent earlier.

Listing out other decisions of the GST Council, the Jaitley said the services supplied by the banks to Jan-Dhan account holders have been exempted from GST.

Producers Guild of India has hailed the decision of government to reduce GST on cinema tickets as a "progressive step" which will help the industry "move forward positively".

Most other items saw tax rate cuts from 18% to 12% and 5%. So we had only transiently put them at 28 per cent, because if we had immediately brought it down then the revenue impact would have been there and therefore the social expenditure of central and state governments would have suffered. However, GST is not levied on buyers of real estate properties for which completion certificate has been issued at the time of sale.

Airconditioners and dishwashers have been left untouched at the highest rate because these are not items of common use in India, he said.

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"The GST council has followed a pragmatic policy by bringing down the rates gradually, taking into consideration the revenue realisation and affordability, and this will stabilise and strengthen GST further", a Ficci statement quoted Somany as saying.

GST on solar power generating plants and renewable energy items have also been reduced, he added.

Rajeev Talwar, president, PHD Chamber of Commerce and Industry said consistent indirect tax revenue growth along with reduction in high GST rates indicate that tax base is widening and economic activity is expanding.

The 31st GST Council meeting has reportedly approved a proposal to form a 7-Member Group of Ministers to study the revenue trend, including analysing the reasons for structural patterns affecting the revenue collection in some of the states. The GST Council had gone for a massive 10% cut.

He said the Council will also consider a composition scheme for small suppliers, a calamity cess and tax rates on the lottery.

"The reduction in GST rates announced would certainly bring economic benefits inter-alia political interpretations".