Lowest GST slab can be reduced to 3%, says Bihar Deputy CM Sushil Kumar Modi

By NT Bureau Published on Jul 23, 2018 02:32 PM IST

Bihar: Slabs under goods and services tax (GST) can be reduced to three per cent from five per cent slab at present in coming days for the convenience of consumers and businesses, Sushil Kumar Modi, Bihar deputy chief minister and head of high-level minister panel on GST said.

In an interview, Modi said that there are five slabs in GST and "there is an intention to reduce it to three slabs but it will take some time" as it is related to revenue.

Reacting to questions raised by former finance minister P Chidambaram that why rates of 88 items were not reduced by GST Council in 2017, Modi said, "This is not a decision where only BJP government is involved. The decision has been taken by GST Council in which Congress-led governments are also involved."

He said that after the implementation of GST, initially, it was to ensure that there should be no revenue loss and then, the rate on many items were gradually reduced with stabilisation of revenue.

Modi said that average revenue from GST is approximately Rs 95,000 crore and in such situation, rates are being reduced, which is leading to a reduction in the price of many consumer items and benefitting the middle class.

28% tax slab only for luxury goods

Experts said going forward as the revenues stabilise, the Council may look at further rationalisation of the 28 per cent slab, to restrict the highest tax slab to super luxury and sin goods.

The 35 goods which will be left in highest slab once the new GST rates are implemented from 27 July, also include cement, automobile parts, tyres, automobile equipment, motor vehicles. yachts, aircraft, aerated drinks, betting and demerit items like tobacco, cigarette and pan masala.

The GST Council has pruned the 28 per cent slab by cutting tax rates on 191 goods over the last one year, leaving just 35 items, including AC, digital camera, video recorders, dishwashing machine and automobiles, in the highest tax bracket.

There were around 226 goods in the 28 per cent category when GST was implemented on 1 July 2017.

Covai apparel industry thanks govt on ITC refund issue
The Apparel Export Promotion Council (AEPC) welcomed the GST Council's decision to allow input tax credit refund, a long-pending demand of the textile industry, and thanked Union Textiles Minister Smriti Irani for taking up the issue.

In a letter to Irani, AEPC Vice-Chairman A Shaktivel thanked her on behalf of the apparel industry for her 'splendid support' toward reviving the industry.

The minister had successfully taken up the issue of ITC Refund with GST Council, which has now agreed for the long-standing demand, he said. These initiatives would help the revival of the apparel sector and to become competitive globally, he added.